Here comes trouble

by | Jun 15, 2009 | Climate and resource scarcity

From a post here last October:

[We can expect] a reduction in commodity prices for the duration of the global downturn (however long that may be) as demand for them falls.  As I’ve mentioned, futures prices for grain crops are already falling; we can expect that trend to be supported by falling energy prices, which will reduce some of the pressure on food that’s come via fertiliser prices, transport costs and demand for crops as biofuels.

That said, let’s be clear: the fall in commodity prices due to a global downturn does not mean that we’re out of the woods for good on high food and fuel prices. As Javier Blas notes in the FT today, the downturn also means that necessary investment in increasing supply will be put off.  As soon as we’re out of the dowturn and demand starts going up again, we’ll discover that there’s been no shift in the underlying supply fundamentals – and hence that the stagflation drivers we were all worrying about until the credit crunch really began in earnest are just waiting where we left them.

Latest oil price data (Jul 08 – now, courtesy of BBC News):

Latest FAO Food Price Index:

Todd Stern: what the US wants from China on climate

by | Jun 15, 2009 | Climate and resource scarcity, North America

US climate envoy, Todd Stern has tried to clarify exactly what the Obama administration wants from China on climate at Copenhagen (see post from Leo and me on the confusing signals the US has been sending out).

So here it is:

  • “Very considerable” reductions on China’s business as usual emissions.
  • These reductions to be binding, transparently measured and verifiable.
  • No absolute emissions reductions but (preferably at least) a designated year when China’s emissions should peak.
  • China’s commitment to be consistent with the world stabilising its emissions at around 450 ppm (“we don’t know whether it’s 445 or 460 or… but in that general range”).
  • The package to be backed up by carbon offsets from the US to China – but these offsets should have “real environmental integrity” – and technology cooperation.

Obvious questions to ask Stern –

  1. Do you believe that President Obama’s domestic commitments on climate are consistent with a 450ppm stabilization target?
  2. Will the United States be pushing for a 450ppm target to be enshrined in the Copenhagen agreement?
  3. When does the United States think Chinese emissions should peak to meet 450ppm?
  4. When does the United States expect global emissions to peak?