Looking Into 2016

I want to leave the depressing and distracting circus called "the Presidential Election of 2016" aside as it burns so brightly on cable television that it distracts our attention from other things that are equally important to consider and ponder.&#160;Through the lens of some of the forecasts I have made, here is a look at some large dynamics and trends that became clear in 2015 and will be of significance in 2016.Energy2015 was a tipping point year for energy.&#160; The price of oil collapsed.&#160; We will probably never see $100/barrel oil pricing again.&#160; In January, I had suggested that the price range for the next two-plus years would be $45-90/barrel.&#160; I was clearly wrong on the down side and I think I am wrong on the upside.&#160; I think that in 2016 the price range will largely be $30-60 and it may not get up to $60 unless there is some major negative event in Saudi Arabia. Even with the now open tension between Saudi Arabia and Iran, the price of oil has dropped.In September, I forecast: 2015 might well turn out to be the peak year of fossil fuel consumption and fossil fuel emissions.&#160;&#160; If this turns out to be true then 2015-2016 will be the tipping point for global energy.&#160; For example, if by 2020 the financial markets see that fossil fuel use is declining, it will look at that industry as a short-term investment of no growth.&#160; This will either trigger the current top companies to either accept, decline or double down on alternative and renewable energy investments as that is the only growth part of the energy sector.In February, I forecast: The collapse in oil prices would cause great geo-political change and disruption for at least 24 months.&#160; This will clearly be the case as many oil-exporting countries such as Venezuela and Russia produce oil at costs higher than current pricing.&#160; We can already see this taking effect in Venezuela with the collapse of their economy and resultant electoral defeat by the party that used to be led by Hugo Chavez.&#160; Look for more negative economic impact for any oil exporting country other than Saudi Arabia, which has the lowest production costs in the world.In December 2014, I forecast: Humanity has entered a new era of lower cost energy that could last for a number of years.&#160; This is based upon the collapse of oil prices, the dramatic drop in the cost of wind and solar over the past decade, the increasingly efficient transportation and building sectors, and the growing acceptance of climate change with the resultant understanding that fossil fuel use fall as fast as possible.Climate ChangeThe critical mass of thinking and acceptance that climate change is a clear threat to civilization has been reached.&#160; Back in July 2013, I forecast: "Extreme weather and droughts will lead the change in consciousness about climate change starting in 2014."&#160; This has occurred and the just completed Paris climate summit has marked the turning point.&#160; The Paris accord in no way solves the problem and the actions suggested are inadequate to avoid massive economic loss and social upheaval, but it will be very important as it indicates a shift in the investment possibilities in energy.Back in April 2009, I wrote: "Water --&#160;access to, use of, conservation of, and cost of --&#160;will be one of the most significant issues for humanity by 2018."In August of 2014, I forecast: "Water disputes will grow in 2015 and the first armed conflict over water will occur in 2016."&#160;This will happen.&#160; We are well into the first global water crisis in human history.&#160; How we humans gather and use water is now a top issue for the world.Inflation and GDPBoth will remain low in the U.S. and developed countries.&#160; Inflation will continue to rage in the less developed countries or countries dealing with the collapse of oil prices.In April of 2011, I forecast: Europe and the Euro Zone will not be a growth zone until 2020.&#160; This will continue to be true.In recent columns elsewhere I suggested that one of the reasons for low inflation in this century was the Internet and that will continue.&#160; In addition, the GDP in the U.S. may well be higher than reported as much of it is still based on Industrial Age physical production.&#160; So inflation will remain historically low and the U.S. GDP will be higher than reported.MigrationWe have entered the greatest age of migration in history in terms of total number of people.&#160; This was clearly the case this year with refugees from the Middle East.&#160; In "Entering the Shift Age" written in 2012, I wrote that the Shift Age would be the greatest age of migration in history.&#160; This goes way beyond refugees from war but also global workers and by the mid-2020s, millions a year due to climate change-triggered sea level rise, droughts and floods.The in-place nation state models for dealing with this are totally inadequate and this will be an ongoing issue in 2016 and for the next 15 years.&#160; We are in the global stage of human evolution so increasingly we will become global citizens.Marijuana Decriminalization2016 will be the year when the vast majority of Americans will live in states that have decriminalized or legalized marijuana.&#160; California will approve it as will other states in referendums in November.&#160; Back in September 2010, I forecast: "Marijuana will be decriminalized in America by the middle of the decade."&#160;Between 2016- 2020 most states will approve at least some decriminalization of marijuana.&#160; The tourism statistics will drive this [Why be the state that stands out as tourists and conferences move to those states that have legalized marijuana?].&#160; The lack of funds will make a new sin tax extremely attractive. Aging baby boomers with aches and pains will demand it. The new regime in Canada will legalize marijuana, and if Mexico move forward with it as it has discussed, the path will be clear.The direction is clear. Legalization will dramatically move forward in 2016.Media and CommunicationsBack in July of 2008 the forecast here was "Internet 2.0 equals video. Video will be the dominant content on the Internet."&#160; We all now experience this in our daily reality.&#160; It is one of the reasons that the larger screen smart phones are winning the day as watching video on the larger screens is a better experience.&#160; The share of smart phones with large screens will increase.Streaming of video and audio will continue to grow, ever more altering viewing habits, patterns, measurement and the way that media is consumed.Back in November 2009, the forecast here stated that streaming video programs would be a disruptive force to the television business by 2014. This is now obvious to all.&#160; In October of 2014, I again stated that 2015 and 2016 would be years when streaming severely challenged legacy distribution models.&#160;In summary, the world of energy will accelerate an incredible reorientation away from fossil fuels to renewables.&#160; Climate change will finally be increasingly understood to be a true threat to civilization this century.&#160; Migration will be an ongoing global issue. Inflation will remain low in developed countries and GDP in these countries will be greater than governmental agencies will report.The speed of change will continue to accelerate.&#160; The speed of change generally and specifically technological change is now the slowest it will be for the rest of your life.Photograph courtesy of Corbis. The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com / MyersBizNet, Inc. management or associated bloggers.

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Looking Into 2016

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David Houle

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Looking Into 2016

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