by Alex Evans | May 29, 2008 | Climate and resource scarcity, North America
You’ve heard of greenwash. Now: cornwash! A firm called Abengoa Bioenergy has a full page advertisement in today’s FT, which begins thus:
Manipulation: Bioethanol is the main cause of increased food prices.
Evidence: The main factors of the staggering cost of food are a shift in the Asian diet … and the current price for oil…. In fact, it is estimated that the impact of biofuels on cereal prices will only be in the range of 3% to 6% as compared to 2006 prices.
Where to start? Well, maybe with the point that their advert rests on attacking a straw man. Hardly anyone would disagree that high income growth, leading to changing diet patterns, is the single largest driver of rising prices.
What the advert doesn’t say is that most analysts would also put biofuels as the second largest. Opinion varies as to how much of the food price rise over the last three years is down to biofuels; FAO reckon 15-20%, while IFPRI reckon it’s more like 30%. (I know of at least two experts in the World Bank who’d argue privately that the figure is somewhere between 50% and 70%.) Here‘s one of the authors of FAO’s latest World Food Outlook report:
Biofuels are the largest new source of demand for agriculture and are causing higher prices. We are very worried particularly about biofuel policy. US government incentives for ethanol producers are distorting the market.
True, not all biofuels are problematic. Second generation biofuels like cellulose are great, though not commercially viable yet. Jatropha looks promising. Ethanol from sugar may yet prove sustainable.
But as the 5th largest producer of bioethanol in the US, Abengoa’s one of the prime beneficiaries of subsidies for corn-based ethanol – which, despite being on track to hoover up a whole third of the US corn crop this year, is nonetheless one of the biofuels that from a food security or climate viewpoint alike just makes no sense: for the amount of corn it takes to fill up an SUV with ethanol, you could feed a person for a year.
by Alex Evans | May 28, 2008 | Climate and resource scarcity, Global system, Influence and networks, UK
No sooner do I finish my post this morning on high oil prices than I discover Gordon Brown in the Guardian, sharing our pain on energy prices (“…and I know that families up and down the country…” [cont. page 94]).
But his article is worth a read, for two reasons. First, while it doesn’t actually use the words “oil” and “peak”, it goes pretty close. Here’s a sample:
The cause of rising prices is clear: growing demand and too little supply to meet it both now and – perhaps of even greater significance – in the future…
Overall, by 2020, global demand for energy will rise by 50% [actually the IEA’s projection is a 50 per cent rise by 2030, not 2020, as Brown knows; but let’s not quibble]. It is the market’s belief that ever-growing demand will continue to outstrip supply that has pushed up the oil price.
And we are becoming increasingly aware of the technical, financial and political barriers to the production of more oil. Every country must find ways of being more efficient and diversifying supply. And as continuing high oil prices present us all with an immense challenge, the way we confront these issues will define our era.
Second, the article’s interesting because of the way it falls into a classic trap: confusing “oil” with “energy”. The article’s problem definition is about oil; the very first sentence says that “the global economy is facing the third great oil shock of recent decades”. So what needs to be done?
…we need to accelerate the development and deployment of alternative sources of energy, reducing global dependence on oil. Britain will increase its investment in renewables, including decentralised generation. We will build one of the world’s first commercial-scale carbon capture and storage coal plants and we have committed to a nuclear building programme to ensure that the UK’s emissions and dependence on fossil fuels do not rise as existing nuclear stations close.
So although the crisis is in oil – a liquid fuel for transport, in other words – the answer, we are told, lies with renewables, decentralised generation, carbon capture and storage and nuclear new build: with the power generation sector, in short.
This shows a pretty big lack of energy literacy. The only way these changes in the power sector will help British voters out on high oil prices would be if there was a massive roll-out of electric cars that could be recharged from the mains; or using electric power to electrolyse hydrogen on a massive scale to power cars. Not only is neither of these technologies anywhere close to commercial deployment in the UK, they’re also not even mentioned in the article.
Update: see also this post on electric cars.
by Alex Evans | May 28, 2008 | Climate and resource scarcity
The FT has a long analysis piece this morning on how the political salience of environmental issues is faring in Britain as the economy nosedives. The news ain’t good:
At a time of falling house prices and rising household costs, people are telling pollsters that they are no longer quite so interested in saving the planet. Ipsos Mori has found that environmental concerns reached a pinnacle in January 2007, when 19 per cent of people, unprompted, named the environment as one of the biggest issues facing Britain today, compared with just a few per cent several years earlier. But by January 2008, that figure had fallen to 8 per cent, while the economy was rated a top concern by one in five. One very senior member of the shadow cabinet put it more strongly: “People hate this green stuff.”
But on the other hand, CNN has this:
At a time when gas prices are at an all-time high, Americans have curtailed their driving at a historic rate. The Department of Transportation said figures from March show the steepest decrease in driving ever recorded.
Compared with March a year earlier, Americans drove an estimated 4.3 percent less — that’s 11 billion fewer miles, the DOT’s Federal Highway Administration said Monday, calling it “the sharpest yearly drop for any month in FHWA history.”
The question, then: as far as climate change is concerned, does a drop in public concern for the environment actually matter, as long as the oil price keeps on rising? Answer: yes, because there’s absolutely no law to say that pursuing enery independence is necessarily green.
Exhibit A: corn-based ethanol. Pointless as a climate mitigation measure (and seriously harmful on the food security front). As an energy security measure, unfortunately, rather effective.
Exhibit B: liquid fuels from coal. The US National Association of Mining is already out there making the arguments. Also rather effective from an energy security point of view, but not good at all for the climate.
All this adds up to a pretty good case for policymakers to focus heavy fire on unlocking electric cars, it seems to me, given how far away hydrogen still looks.
by Alex Evans | May 28, 2008 | Climate and resource scarcity, Economics and development
A couple of weeks ago, I wrote a post noting that the global food prices debate was hallmarked by three competing schools of thought on trade contesting food as a key battleground. One schools thinks liberalisation is the answer (think World Bank). A second reckons self-sufficiency is the way forward (think 1970s import substitution). A third likes long-term bilateral contracts (think of China’s approach to securing energy food supplies). But as I wrote at the time, it seemed to me that the none of these three approaches really offered a complete answer.
Talking to friends at NGOs recently, it seems they think so too. But that’s not to say that they’ve got a fully worked-up narrative yet either.
Back in 2005, during the heyday of Make Poverty History and the One Campaign, the mainstay of development NGOs’ policy agenda on trade was something called “policy space“. In a nutshell, policy space was an argument that developing countries should have the freedom to set their own trade rules rather than have liberalisation, or any other standardised approach, forced upon them: they should have the ‘space’ to determine their own policy in other words.
Fast forward to today, though, and the policy space narrative is starting to look in need of renewal – for three reasons.
The first is that arguments about policy space are fighting the last war. NGO activists love to saddle up to fight the evil Washington Consensus, with its dark plans of forcing privatisation, liberalisation and other ills on hapless low income countries. Just one problem: the Washington Consensus ended 15 years ago. Today, the idea that NGOs did so much to champion back then – that there are no one-size-fits-all answers in development – has gone mainstream.
Secondly, the policy space argument is silent about the trade issue that is at the top of developing country governments’ in-tray: security of supply. On food, energy and other commodities, the big worry this year is about scarcity of strategic resources – and as the Philippines discovered this year when its rice supply chains sputtered, all the policy space in the world is no use if the goods you need aren’t for sale.
Finally, arguments in favour of policy space rest on the problematic assumption that if only developing countries were free to take their own decisions, everything would be fine. But what about when developing countries use their policy space to take decisions that are extremely problematic for other poor countries – for instance when Argentina, Kazakhstan, Vietnam or India decide to reduce or suspend exports, leaving other countries (like the Philippines) in the lurch? Policy space has lots to say about developing countries’ rights, in other words – but what about their responsibilities?
While there’s no shortage of specific ideas and policy proposals in the trade context that can help to move things forward on the food prices agenda, what’s still lacking is a narrative that set out the basic approach.
by Charlie Edwards | May 27, 2008 | Conflict and security, UK
Something I hadn’t picked up until recently was the role of the black cab on 7/7. Anecdotal evidence suggests that on the day of the bombings black cabs ferried people to hospitals, carried people to and from the target areas and helped bring relatives and friends together. All for free. It’s not on the same scale as the now famous evacuation on 9/11 when ferries, tugboats, private vessels, and others joined together to evacuate an estimated 300,000 people from lower Manhattan but it is a useful demonstration of community resilience in action.
