Sunday, May 21, 2017

Stock hedges, home insurance, and our misunderstanding of risk

"If you own stocks without a hedge, it's not rational." So says the world's most famous student of risk Nassim Nicholas Taleb in a recent interview with Bloomberg as many of the world's stock markets hover near all-time highs. "It's like buying a house without insurance," he explained. "We have tail risks today that we didn't have before, and every day it gets worse."

"Tail risks" refer to the possibility of unusual, rare, catastrophic events, often of a nature that cannot be anticipated or even imagined. Such events are frequently dubbed black swans, a term made famous by Taleb's book called The Black Swan.

So, what is the perceived difference between houses and stocks and what does that tell us about how we judge risks elsewhere in our lives and societies? First, houses. Houses are very expensive consumer items or investments or both, depending who is buying them and why. Taleb's point is that the value of a house will not track the market if the house burns down.

Every homeowner understands this and buys insurance. In fact, the bank requires insurance if the home has a mortgage. And, that's because, of course, homes don't rebuild themselves if they are destroyed.

The companies underlying stock listings, however, are not obliterated by a market crash. Of course, some companies may disappear if the crash is followed by an economic downturn; but the thousands of companies that make up the exchanges do not all evaporate.

Stocks have historically recovered after losses, even extreme losses. So, the hedging Taleb is suggesting is really about timing. Can an investor afford to wait for the rebound before having to cash in? If Taleb's concerns are borne out in the next few years, many near retirement or already retired may be answering this question.

(The history of stock markets reveals a mixed picture. Some rebounds to previous highs have occurred within months or years. Some have taken decades. The Japanese stock market has yet to revisit the peak of 1989 and currently stands at about half the level of that peak.)

With housing and stocks we have two different kinds of risk, both of which can be hedged so as to prevent a severe loss of net worth. Why do most people only hedge one, namely the home?

Now, most investors diversify their investments. They own some stocks, some bonds, some real estate and perhaps some other investment such as a business they control or an annuity. While diversification, if done properly, can reduce risk, it is not true hedge.

Hedges are designed to go up in value in inverse relation to the decline in value of the instruments they are hedging. Owning gold as a hedge against a stock market crash may or may not work. Gold is not a true hedge in this instance and in the last market crash, it plummeted along with stocks. Stock options that necessarily rise in value as stocks sink are a true hedge.

Of course, homeowners insurance does not insure us against a decline in real estate prices. It turns out that one can actually now hedge that risk with the appropriate financial instruments. But few people do that for their family homes. In fact, people rarely envision having to sell their homes for less than they bought them.

It is this one-way bias that links people's perceptions of both homes and stocks. It is almost inconceivable that any of us might be forced to accept catastrophic losses if only we can hang on long enough. What this view presupposes is that the future will look like the recent past (that is, the last century or so). It will be one of growth, growth, growth. Growth in population. Growth in economic output. Growth in financial wealth. Growth in the energy supplies needed to make all the other growth happen.

It would indeed be a black swan if growth failed to appear or was so stunted that few people obtained any benefits from it. (Has the second scenario already arrived?) But the twin crises of energy depletion and climate change make such a future ever more likely. These crises aren't hidden and they aren't cyclical. They are advancing in such a way that the risks of both are not staying neatly tucked under the "tails" of the bell-shaped distribution curve of possible outcomes. Our current actions make them inevitable.

Things could change. Human societies could revolutionize the way they live so as to avert disastrous climate change or fossil fuel depletion (that is, depletion without adequate alternative energy). But, it seems that such a revolution would be more akin to a black swan than any rendezvous with energy or climate Armageddon.

We've convinced ourselves as a world society that such outcomes are so unlikely that we are making what amount to token efforts to avert them. Renewable energy is being deployed rapidly, but not rapidly enough to replace the current fossil fuel infrastructure soon enough to prevent a climate catastrophe (and perhaps an energy insufficiency).

There is no insurance policy that will protect us against catastrophic climate change. We cannot get our habitable climate back on any time scale that matters to humans once it's gone. The insurance policy is us, that is, changes in our behavior and our technology done quickly enough to matter. There is no other hedge that will help us.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, May 14, 2017

The trouble with infrastructure

The trouble with infrastructure is that it breaks down and needs to be repaired, it wears out and needs to be replaced, and it gets destroyed and needs to be rebuilt. All that requires energy, resources, labor and money.

Conceptually, here's the problem we face. The bigger we make any part of our infrastructure--roads, pipelines, electricity grids, water and sewer systems--the more expensive it becomes just to keep it in operating order. The same is true for our industrial plant, transportation system, commercial buildings and private homes. Things fall apart over time; entropy makes sure of that. To keep things from degrading to the point where they cannot function requires resources, labor and money--all of which cannot be spent on new infrastructure or productive investment, that is, all of which must go to maintain what we have rather than grow the economy.

The ancient Romans came face to face with this reality. Expansion of the empire had been paid for with booty seized from conquered populations. But once the expansion stopped, so did the booty. The Romans increasingly had to tax themselves in order to pay for large armies to protect the now very long border and for the necessary improvements in roads and other infrastructure to maintain their administrative and military presence throughout the empire.

It didn't last. Eventually, the Romans had to pull back. They had to shrink the empire.

Today, we don't think so much in terms of territory as Gross Domestic Product (GDP) when evaluating our material progress as nations. It turns out that one of the ways to keep the GDP growing is to skimp on maintenance.

In the United States, water systems have been a good place to skimp. After all, much of that infrastructure is underground or at sites remote from the cities it serves. Few will notice. Here's what the experts are saying about the silent degradation of America's water infrastructure:

Estimates of current investments in water infrastructure indicate that the backlog of deferred investments is increasing and renewal cycles are close to 200 years across the range of utility sizes. Resistance to rate increases combined with lack of appreciation of the buildup of renewal needs reinforces the need for effective business cases for pipe renewal. Based on these and other evaluations, it appears that a substantial gap exists between current expenditures on water main renewal and the investment levels needed to sustain system integrity. (emphasis added)

The American Society of Civil Engineers (ASCE) has given near failing grades to the American infrastructure. In a report the ASCE describes the problems with the drinking water infrastructure this way:

Drinking water is delivered via one million miles of pipes across the country. Many of those pipes were laid in the early to mid-20th century with a lifespan of 75 to 100 years....While water consumption is down, there are still an estimated 240,000 water main breaks per year in the United States, wasting over two trillion gallons of treated drinking water.

But drinking water is just one example. A friend alerted me to recent train derailments at New York City's Pennsylvania Station. The derailments caused enough damage to curtail train service for days. The problem is a 100-year-old infrastructure not built for the increasing demands put upon it. The governors of New York and New Jersey want Amtrak replaced as the station's operator.

It's no wonder that the perennially underfunded Amtrak is having trouble keeping up with needed maintenance. But putting someone else in charge doesn't solve the problem of skimping on maintenance unless there is extra money. So, will the governors provide it?

Then there is America's oil and gas pipeline infrastructure. Most of those pipelines are more than 50 years old. We seem willing to pay for rapid expansion of this system as is evidenced by 125,000 miles of new pipeline built since 2010 to accommodate the oil and gas drilling boom in the country.

But maintaining that infrastructure is just a drag on profits--until the consequences become so big that the clean-up and repair costs dwarf the phantom returns which deferred maintenance makes possible.

To be fair pipeline operators don't want leaks or breakdowns. But neither do they want to spend more than they have to to maintain their systems. Who decides how much that should be is a problem regulators and companies are going to be hashing out as pipeline accidents continue to make the news.

All of this brings us back to the conceptual framework I presented at the onset of this piece. Here I turn to the much maligned and much misunderstood project called Limits to Growth. Limits to Growth, of course, refers to modeling of the trajectory of worldwide economic growth in the early 1970s and updated twice since then as detailed in three separate books.

The most frequent outcome of that modeling is the collapse of industrial society starting somewhere in the middle of this century. A common misunderstanding of that model is that collapse is the result of "running out" of resources. But a close reading of Limits to Growth produces a more nuanced and troubling answer.

It is the lack of capital needed to grow which produces the limits referred to in Limits to Growth. We will end up spending so much just to maintain our continually bloating infrastructure (in the broadest meaning of that word), to extract the needed natural resources to do that, and to fight the effects of pollution (through, for example, water and sewage treatment) and now climate change (through, for example, the building and maintenance of seawalls), that we won't have anything left over for investment. When that happens, growth stops. Eventually, the economy shrinks as poorly maintained infrastructure become less productive. This is a collapse, but perhaps not a rapid one.

Infrastructure investment is lauded as the gift that keeps on giving. And, long-lived public and private infrastructure can and does increase economic productivity. But infrastructure can also become the leech that keeps on sucking when it becomes overly large and when we choose temporary economic pain relief and stimulants over the true medicine of forging a new trajectory for our infrastructure which requires deference to the limits we face.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, May 07, 2017

Taking a short break - no post this week

An exceptionally heavy consulting and writing workload has forced me to take a short break from posting. I expect to post again on Sunday, May 14.

Sunday, April 30, 2017

Oil production cuts: Fool me once...no, make that any number of times

The jawboning of oil prices by the Saudi Arabian/Russian tag team should be wearing off after more than a year of actions that don't measure up to the words. Oil prices slumped recently, dropping from around $54 per barrel to just below $50 as of Friday's close.

As if on cue, the Russian energy minister announced Friday that Russia has now met its target of reducing oil production by 300,000 barrels per day. It only took four months to do something that should have taken just weeks. (The agreement came into force on January 1.) And, of course, we'll have to see if the Russians have actually done what they say they've done.

Only a week earlier, the Saudi energy minister indicated that there is momentum growing in OPEC for extending production cuts beyond June for another six months. This announcement comes only six weeks after the same minister said that OPEC would NOT be considering extending the cuts. This is reminiscent of last year's run-up to the production agreement in which Russia and Saudi Arabia kept alternating in making often contradictory announcements to sow confusion about the possibility of a production agreement and keep markets on edge without actually having to do anything.

I continue to question the sincerity of Saudi Arabia and Russia who I believe remain committed to undermining the production of tight oil (shale oil) production in the United States. Despite the cuts agreed to for this year through June, the March numbers just in suggest substantial non-compliance among non-OPEC signers of the production agreement and a reminder that major producers Libya, Nigeria and Iran have been exempted from cuts. Do Saudi Arabia and Russia really want prices to rise enough to make tight oil profitable all across the United States (and not just sweet spots in the Permian Basin)? I'm not convinced.

The Saudis and the Russians want to appear to being "doing something" about low oil prices. But they and their fellow producers aren't really doing enough to push prices higher. And, that may suit the Saudis and the Russians just fine.

Meanwhile, U.S. tight oil producers keep touting ever lower "breakeven" prices for their relatively expensive oil. But as petroleum consultant Art Berman has been pointing out for some time, these lower breakeven prices are almost completely the product of crashing oil service costs rather than technological miracles. And, they aren't limited to tight oil producers, but rather reflect conditions across the entire industry.

The oil service companies and equipment fabricators are faced with depression conditions and have slashed prices to keep some revenue coming in and maintain market share until the next upturn. Pricing for services and oilfield goods is dynamic not static. When conditions improve, costs will rise accordingly and so will breakevens.

One thing all this talk has done is fan speculative interest in the oil futures market where open interest has soared even as prices have traced out a mostly sideways pattern. Clearly, many speculators believe the hype about sharply higher oil prices. I believe they are going to wait quite a while longer--at least until Saudi Arabia and Russia are satisfied that the investment capital flowing to tight oil drillers in the United States has been largely shut down.

At some point low investment worldwide in oil exploration and development will start to make a significant dent in world supplies. Remember: depletion never sleeps. But the world economy may be softening; in its most recent Oil Market Report, the International Energy Agency revised oil demand growth downward in response to slower worldwide economic growth. That suggests that the expected uptick in oil demand growth may not materialize for some time, keeping investment generally low.

The longer investment remains low, the bigger the oil price spike will be when it does arrive in response to shrinking production capacity, rising demand or both. The oil bulls will eventually be right. But will they hang on long enough to enjoy their vindication?

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, April 23, 2017

"Reform" won't solve our biggest problems

"You never cure structural defects; you let the system collapse."

As I contemplated this proposition taken from a recent piece by Nassim Nicholas Taleb, I realized what profound implications accepting it would have for all those engaged in attempting to address our current social, political and environmental ills.

If it is true that modern capitalism is incompatible with effective action on climate change, if it is true that top-heavy, bureaucratic nations always eventually become captive to their wealthy citizens, if it is true that our centralized, complex, tightly networked systems in finance, agriculture, shipping and manufacturing are exceedingly fragile and prone to failure--if these all represent structural defects, then they cannot be addressed by tinkering or "reform." Those in charge cannot be persuaded to "do something" which is contrary to the structural necessities built into these systems.

The choices then are: 1) Do nothing, 2) insurrection (for which you might be jailed or worse) or 3) start building a decentralized replacement. Since I'm discarding choices one and two, I'll address choice three.

First, adopting choice three doesn't mean we should abandon critiquing the current systems under which we live. Quite the contrary. Those systems are where future adopters of decentralized replacements currently do business. They are the Brand X against which new systems can and need to be compared.

Second, we have good evidence that small-scale governments can actually respond to climate change when large-scale governments can't. Citizens of seaside communities experience the rising ocean waters first hand and have direct access to their elected officials as do those who experience droughts. And those cities have actually taken significant (but still inadequate) steps toward addressing climate change. It is counterintuitive that decentralized governments could act more quickly and effectively on issues of international scope than national governments until we see them in action.

Third, modern communications have become bifurcated. There are large media establishments very much wedded to the status quo and the power elite. The heavy concentration and centralized nature of this type of media makes them uniquely incapable of understanding and communicating much about the merits or even existence of decentralized alternatives.

Then there is the thriving and ever more seamless worldwide digital communication network which allows people across the planet to share their ideas, practices and discoveries with one another without mediation. We should not in this context, however, devalue good old face-to-face communication which still works best of all.

Much of what passes for "media" online is really an attempt to exploit readers for commercial gain and therefore much more a part of the centralized media system. But even here, little-known businesses with new approaches to serving small, niche needs provide an alternative to the conglomerated consumer companies of our age.

Fourth, the worldwide tightly networked systems which dominate our lives today are too fragile to last. But that doesn't mean they will dissolve all at once or at the same rate. Parts will decline, parts will evolve and parts will disappear on different schedules. Certain aspects of existing systems might actually be of some use in the new decentralized system. A warehouse used for international trade can just as well be used for regional trade.

We can boil at the inequities and destructiveness of the current system. There are times and places that are appropriate for that. But our best chance to traverse the the path to a more decentralized world while minimizing harm and maximizing success is to begin building it.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, April 16, 2017

Split personalities: We like some science, but not all of it

We modern folk are in a bind. We embrace what the sciences and the technology that flows from them have to offer, but we refuse to believe that we live in the world described by those very sciences.

Here I'm not merely talking about climate change deniers who, of course, fit this description. They merrily dial number after number on their cellphones, but they do so without realizing that in their climate change denial they are rejecting the very same science that underpins the phone they are using: physics.

But so many others live in this dual world as well. We humans imagine ourselves set apart from the natural world. And yet, our very bodies are the subject of scientific investigations. So we turn to our minds which we imagine set us apart from the natural world. But what is the mind? Do we not place the mind in the body? Are its manifestations not speech, writing, music, dance, and graphic arts which require the body for their expression.

The science of physics tells us that we live in a thermodynamic system. The universe is a thermodynamic system and so by definition must our Earth be one. Thermodynamic systems produce entropy, lots of it. Some two-thirds of all the energy we use in the United States is wasted. That's right, wasted. That entropy shows up as climate-changing carbon dioxide in the atmosphere which is also acidifying the oceans. It shows up as barren landscapes left behind by coal and other mining. It shows up as waste heat and waste products flowing from our factories, our homes and our vehicles.

In a broader sense, the entropy that we used to see and feel in the United States in the form of so-called "smokestack" industries has now been moved to China where another yet entropic problem, air pollution, chokes the urban population on a daily basis.

We think our presence is making the world more "orderly," but, in fact, we are filling it with new and dangerous expressions of entropy.

Geology tells us that metals, mined fertilizers, and our dominate form of energy, fossil fuels, are finite. The Earth is a sphere and has no pipeline to some other planet. And yet, there are people who claim with a straight face that resources including energy resources are infinite. This is so because "resources come out of people's minds." There's that word "mind" again. Just where does it reside?

We speak of leaving the planet and setting up colonies on Mars. But biology and physics tell us that those attempting to do so will suffer dementia resulting from the cosmic radiation that will bombard their brains. Humans on Earth are protected from this type of radiation by the Earth's magnetosphere. Not so in deep space or on the red planet which lacks a magnetosphere. There might be ways to protect such astronauts, but they would require much additional weight, both for the trip and for any enclosures or ships sent to the surface of Mars.

The point is that biology and ecology tell us that humans are evolved specifically to survive and thrive within the narrow strip of the biosphere. They can for brief periods with special apparatus live outside that. But long-term survival cannot be assured, in part, because the biosphere is far too complicated for us to understand and replicate. Attempts to do so have been miserable failures. The long and the short of it is that we aren't going to colonize space except as an expensive form of suicide.

Some look at measures of human well-being and declare that all is well and getting better. But this presupposes that we understand the biosphere better than we do. To analogize, you can live well on your savings until your savings run out. Likewise, humans can keep increasing their well-being by drawing down the natural capital of the biosphere (fisheries, soil, water, metals, fossil fuels), but eventually this drawdown will start to cut into the productivity of the biosphere as it has for many fisheries, water tables and some farmland ruined by erosion and salt. The drawdown will also affect the quality and price of fossil fuels and other minerals available as we seek the harder-to-get resources.

But perhaps what's even more important than what the sciences tell us is what they cannot tell us. Those on the cutting edge of their scientific disciplines are putting the lie to the idea that we are close to understanding how our universe works. Instead, what our latest researches are revealing is how little we know and how much more we have to find out.

Those who see comfort in this say that we can proceed full ahead on economic growth and the attendant speedup in resource extraction since we do not know for sure that they will kill us or seriously degrade our lives. What these people do is simply extrapolate the recent past into the future. It is a religious belief and not one based on sound thinking. What they do not take into account is the risk of systemic discontinuities, systemic ruin, that could come from climate change, resource extraction and new, untried technologies.

The approach is akin to playing roulette when we already know the wheel is stacked against us. In such a game, the more bets we put down, the more likely we will be ruined. But it feels great as long as we are winning.

It is the fate of the compulsive gambler to keep on gambling until he or she loses everything. That is our current trajectory, and it is a trajectory that requires a split personality regarding what we know from the sciences in order to maintain a false sense of security.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, April 09, 2017

Living world: Should natural entities be treated as legal persons?

This year the New Zealand parliament voted to give legal personhood to a river and provided for the appointment of two guardians to represent it. In India a court extended legal personhood to the Ganges and Yamuna rivers and the glaciers that feed them.

It defies our normal modes of thinking that natural entities such as trees, rivers, mountains, lakes, and glaciers should be given legal standing in courts and public life. And yet we take as a matter of course the legal rights of other inanimate entities:

The world of the lawyer is peopled with inanimate right-holders: trusts, corporations, joint ventures, municipalities, Subchapter R partnerships, and nation-states, to mention just a few. Ships, still referred to by courts in the feminine gender, have long had an independent jural life, often with striking consequences.

The quotation comes from a famous law review article on the topic of rights for natural entities entitled "Should Trees Have Standing? Toward Legal Rights For Natural Objects," written in 1972 by Christopher Stone, a professor of law at the University of Southern California.

Perhaps our most important blind spot is that we forget that we humans are natural entities as well. Scientists study our bodies just as they do the bodies of other animals--except that these scientists are not allowed to kill humans to dissect them or expose them to potentially harmful substances without informed consent. (Animal rights activists would argue that such protections should be extended to all animals.)

Ultimately, what's at stake is what our relationship with other natural entities will be and whether it is in our interest to grant them legal rights. It is well to remember that full legal rights for women, African-Americans, Native Americans, the mentally and physically disabled, and many other disadvantaged groups were once unthinkable, too. And yet, today few would argue against including these previously excluded groups within the realm of legal personhood.

But, one might say, these are people and belong to a special category. Nature cannot speak for itself as we humans do. To which law review author Stone replies:

It is not inevitable, nor is it wise, that natural objects should have no rights to seek redress in their own behalf. It is no answer to say that streams and forests cannot have standing because streams and forests cannot speak. Corporations cannot speak either; nor can states, estates, infants, incompetents, municipalities or universities. Lawyers speak for them, as they customarily do for the ordinary citizen with legal problems.

Now, perhaps the most important phrase in the above quotation is "in their own behalf." This explains why we might not regard it as sufficient merely to compel people by law and by custom to take care of natural entities. When natural entities do not have independent advocacy, it is all too easy to consider them merely as the instruments of humans. We call them "resources" and that means they are for our use as we please. Nature becomes merely a great vat of primordial clay from which we humans can take whatever we want and shape it to our needs without regard to the needs of any other entities.

This is the relationship of a master to a slave, Stone points out. That master is concerned about his slave as a piece of valuable property that he does not want stolen or injured by another; but the master reserves the right to injure the slave for his own purposes (through overwork, lack of food, poor medical care and, of course, involuntary servitude.)

In the United States we already have the Endangered Species Act. Lawyers speak regularly on behalf of species in court proceedings. The purpose of the act, of course, is not to protect individual organisms, but to insure the survival of an entire species. I wonder how we would be obliged to act if humans were classified as an endangered species under the law. What might we as a species be required to change to insure our own survival (or face an an angry and powerful federal judge)?

What we face instead of a judge is the rest of the natural world. In fact, scientists James Lovelock and Lynn Margulis proposed the Gaia Theory in the early 1970s. The theory re-imagines the Earth as a single biogeochemical system that is self-regulating in the way that a single organism is said to be. The organic and inorganic worlds influence one another. Geology, biology and chemistry are bound up as one field when we look, for example, at the carbonate layers of the Earth which were formed by living creatures. Life is not an afterthought on Earth; it is a major geological force on the planet.

This is not a new animism. This is not to say that rocks have the mental faculties of humans (though the opposite is sometimes said of people we don't like). But there is a flow of information and interaction which regulates key processes on the planet to keep it habitable.

Those engaged in climate change activism understand this and fear that the dawn of the Anthropocene means that the Earth will within the next several decades become increasingly hostile to the life which now inhabits it including human life.

But, the argument for legal rights for natural entities goes beyond human survival. It imagines that natural entities have worth in and of themselves and not just as materials necessary for human survival. This move has been essential for women and racial and ethnic groups who have achieved full legal rights. They have worth in and of themselves and not as mere instruments of others.

It may be profitable for a nation to lift up its oppressed peoples and include them in the mainstream of social, economic and political life. It may be good for all of us. But the worth of these oppressed peoples does not reside in their profitability, but in their status as autonomous individuals who have self-determination.

What goes unrecognized by most is that the natural entities we think are currently excluded from our legal and political lives are actually sitting in our courtrooms and legislatures across the planet. They sit quietly, implacably in their insistence that the laws of nature will not be contravened. Our understanding of such laws can be used to benefit us--to extract resources and to protect us from natural dangers--but we cannot repeal those laws for they do not arise from legislative or judicial fiat.

Slowly, haltingly, we are coming to understand this and providing representation for the entities of nature in our various institutions--representation that renders into human speech and writing the information that is running past us everyday in the environment as if it were coursing through a series of gargantuan broadband cables connecting everything on the planet.

This is why it is so disturbing to see an American administration who believes we should reverse this trend and go back to pretending that the natural entities aren't in the room. Those entities who are ignored turn to conflict to be heard. Already that conflict has taken the form of a great worldwide fever in the planet's atmosphere. It is in evidence in fisheries that have been depleted, soil that has been eroded or made too salty to sow, and water, air and land that continue to be fouled by toxic pollution.

We can easily see that these effects are due to the acts of humans. What we must now see is that they are also due to the reactions of nature. The conflict can only be resolved through dialogue, and that dialogue can only come into existence when we recognize that we are dealing with entities that have a life of their own.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He has been a regular contributor to the Energy Voices section of The Christian Science Monitor and is author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.