The paper "Peak Energy Is Most Fundamentally an Economic Issue" is a perfect example of a macro & microeconomics literature review. Peak energy refers to a peak in the rate of energy production. Specifically, this concept denotes a time when the global rate of extraction of energy resources reaches the maximum, after which a terminal decline in the rate of production follows (Mó rrí gan Tariel, 2010). The fact that non-renewable energy resources have formed the pillar of growth of economies means that a constraint in those resources will not just reduce the size of an economy but it is likely to break up.
In short, the existing growth of economies of nations as well as the world economy has evolved with particular dynamics and support from various inputs with energy resources playing the biggest part. As a result, we are locked up in hyper-complex economic processes that are increasing our vulnerability, but which we cannot be able to alter without adversely affecting the growth of our economies (Korowicz David, 2010). Consequently, we are likely to witness a decline or eventual collapse of our economies owing to the aforementioned problem. This paper suggests that peak energy is most fundamentally an economic issue.
To understand this better, it will be prudent to give a brief background of the “ peak energy” concept. In order to address this issue adequately, this paper highlights the impact of peak energy on the economies of nations. The concept of peak energy as applied to the rate of energy production is derived from the Hubbert Curve, which has been applied to the nation’ s domestic production rate in the past (McPherson Guy, 2010). The concept of Hubert Linearization is applied in predicting the amount of a non-renewable resource that is recoverable.
This model assumes that it is possible to describe the “ annual production trajectory of a non-renewable resource” logistically (McPherson Guy, 2010). According to this model, the annual production of a non-renewable resource is prone to grow at an increasing rate. But the production slows down at a certain point called the point of inflection.
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Korowicz David, “Designing systems for a changing world” The Foundation for the Economics of Sustainabilityhttp://www.feasta.org/documents/risk_resilience/Tipping_Point.pdf (accessed July 18, 2011)
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Planck Foundation, 20th Century Weimar Warning”, Energy Economics, http://www.planck.org/downloads/Energy-Economics.pdf (accessed July 18, 2011)
Tariel, Mórrígan, “Peak energy, climate change, and the collapse of global civilization” The Current peak of oil crisis, Dec 2010 http://permaculture.com.au/online/articles/peak-energy-climate-change-and-the-collapse-of-global-civilisation-the-curent-peak-oil-crisis (accessed July 18, 2011)