Mainstream political leaders may now be acknowledging the serious challenge posed by climate change. But they are engaged in a massive propaganda exercise to reassure people that continued growth is compatible with reductions in carbon emissions through technological innovation and resource substitution.

This is the business-as-usual wolf dressed up in a green cloak of environmental respectability. Whatever efficiency gains are made will be outweighed by the increasing pressure on declining stocks of finite resources that are becoming more difficult to access and require more energy-intensive forms of extraction as they are depleted.

Now that the finishing post for globalised capitalism is in sight, there are only two runners left in the race, irretrievable economic breakdown or irreversible climate change. But instead of responding with policies that reflect the scale of the challenge, world leaders continue to peddle the growth fetish.

This isn’t re-arranging the deckchairs on the Titanic. This is laying out sunbeds, building a heated swimming pool (solar-powered of course) and expanding the orchestra with brass and percussion sections, conveniently drowning out the shouts of dismay and the screams of panic as the ship sinks.

An explanation for this rabbit-in-the-headlights paralysis rests with the political consensus that the end of growth means the end of progress. The longer-term, historical memory is of the Great Depression in the 1930s, and other periods of economic dislocation and mass unemployment, where extremism flourishes and social chaos threatens.

In comparison, the post-war experience of economic expansion and technological innovation is associated with prosperity and political stability. There remains a strong conviction that a future of growing material wealth is still achievable, without which we face a return to the Dark Ages.

But the tectonic plates have shifted and so must our political culture. The signs are all too clear with the desperate bail-out of the international financial system after the orgy of speculation that ended in the toxic debts and recession of 2008-09. This was the first major crisis of resource depletion in the 21st Century.

The rapid rise in oil prices up to the spring of 2008, caused by the combination of increased global demand and peak production, undermined confidence in future growth projections, reduced consumer spending, and triggered large withdrawals of capital from the financial markets. Some of the leading institutions, heavily exposed to the sub-prime mortgage business, went into free-fall. Governments were left with little choice but to massively intervene or face the complete breakdown of both their domestic and the global banking system.  

Large public-sector debts and a continued monetary stimulus have been justified as the only way to maintain confidence, to boost demand and, therefore, to prevent a slide into severe depression. All this with the assumption that reflationary policies will restore growth in the medium-term, providing the revenues necessary to rebalance public finances.

These policies will fail. Not simply because the level of public debt is so great but also because post-war, trend growth is no longer achievable. Any recovery will be based on expanding international trade, with government subsidies and loans intended to prop up domestic manufacturing capacity in traditional areas like vehicle production. But higher global demand, not only for oil, but other finite resources that are reaching peak production, will lead to massive price rises and an intensified crisis of resource depletion far more severe than the one in 2008-9.