by Alex Evans | May 30, 2008 | Climate and resource scarcity, Conflict and security, Economics and development
Next week, the UN is holding a major summit on food security in Rome – I’ll be there throughout (and blogging regularly on what goes on). Ahead of the kick-off, I’ve updated the Global Dashboard page on where to get briefed on food prices, and put out a scene-setter press release through Chatham House that sets out a few thoughts on what the summit needs to achieve.
This week’s already seen a couple of new items on food prices that are worth a look, starting with a new annual FAO / OECD outlook report – which this year looks all the way out to 2017. It finds that although prices will come down in the short term (which you already knew, since you read it here on Global Dashboard on March 18th), nominal prices over the medium term will remain “substantially above” levels over the last ten years. In other words, it’s not just a blip.
Also worth a look is World Bank President Bob Zoellick’s ten point plan for food prices, published in the FT this morning. His article confirms that he’s well ahead of the curve on understanding the need for an integrated approach to scarcity issues:he says collective action is needed on “the interconnected challenges of energy, food and water [which will be] drivers of the world economy and security”. (I’ll be publishing a paper on how the multilateral system needs to be reformed to cope better with scarcity issues just before the G8 in early July.)
What will actually happen at the summit is currently anyone’s guess. It’s fair to say that FAO haven’t been very proactive in briefing the media on likely outcomes or what they’re hoping for, which puts them in the rather hazardous position of allowing high expectations to emerge without really managing them. Another risk is that a major spat over biofuels could erupt: Ahmadinejad and Chavez will both be at the food summit, and would like nothing better to embarrass the US over its support for ethanol – and while US subsidies for corn-based ethanol are certainly problematic, it’s hard to see these particular interlocutors opening up much political space on Capitol Hill as legislators contemplate the Farm Bill.
But on the upside, great progress has been made on financing the immediate humanitarian needs (after Saudi Arabia stunned everyone by coming up with half a billion dollars last week – a coup for WFP head Josette Sheeran and for UN Emergency Relief Coordinator Sir John Holmes, who’s invested much time encouraging Gulf countries to contribute). This, together with the prospect of some short term relief on prices, gives policymakers a chance to look ahead towards the longer term challenges as well as short term crisis management.
It’s also hard to remember a time when the UN system and the international financial institutions have worked together as closely or as effectively as they seem to have been doing on the UN’s food task force – a great story, given how fragmented the international system usually is, but one that’s gone largely unreported. Even so, the real work in pulling together the longer term agenda is still in front of us…
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 David Steven | May 21, 2008 | Climate and resource scarcity, North America, UK
I am at the New America Foundation this morning, where David Miliband is due to ‘discuss the challenge of promoting Western style liberalism, democracy, civil society development in a world that in some corners views the word “democracy” suspiciously.’ The event will be streamed live here.
This is Miliband’s opportunity to connect with a younger audience in Washington. The meeting has been set up by the British Council, as part of its TN2020 network. I moderated the network’s first event in Berlin just before Easter, while Alex and I wrote an essay on climate for the TN2020 book. The intro:
The climate problem is now urgent enough to be a major determinant of the transatlantic relationship. In the wake of Bali, we are promised summits and shindigs galore as the world struggles to agree a global deal to replace Kyoto. This will keep climate at the top of the political and news agenda.
But if a global deal is signed in 2009, the fun will only just have started. Greenhouse gas emissions will need to be slashed by at least half, and probably much more, by 2050. Rich countries will be expected to make deep cuts almost immediately. A colossal and unprecedented economic realignment will therefore be needed. It’s a huge task. So how will Europe and the US fare on this shifting terrain?
The warm-up act is Andrew Sullivan, über-blogger and hawk turned hardcore Obamafan, and absolutely charming in person. He’s talking about the way that – in the new media age – the British and American media audience are merging, with southern England a centre left or centre right ‘blue state’. “I often feel my blog is better understood in London than it is in certain parts of the United States,” he says.
But then Miliband arrives and Sullivan is shuffled off the stage. Introduced by the Washington Note’s Steve Clemons (and our host) as ‘primarily a blogger’, Miliband sits on the table and talks without notes.
He starts with the much-stated, but seldom practised, point that the new diplomacy needs to meld state-to-state relations, economic integration, and the ‘new public diplomacy’ – the mobilisation of non-state audiences.
The great causes in international relations are far from dead, he says, focusing on four challenges. Can we build strong communities across race and religion? Can we take on the conflicts that blight people’s lives? Can we stabilise the global climate? And can we build stronger and more effective international institutions?
Miliband argues that the problems of globalization will be solved by extending globalization. The world needs to tackle its problems through more internationalism not less.
I suggest that the major challenge for globalisation is the combination of rising expectations with limits to strategic resources (food, energy, emissions etc – it’s now a familiar list). What impact will the politics of scarcity have on the international system?
Miliband’s response (with apologies for the paraphrase – hard to type while nodding attentively):
We are living through an unprecedented triple crunch of credit, food and fuel. The common denominator is between food and fuel is carbon dependence. Climate change closes the circle. The key question is whether we can get on a lower carbon trajectory or not. If we don’t, the conflicts that people fear are a real danger.
So, yes, we share an analysis – but I suspect that, collectively, the world is far from having the answers…
by Alex Evans | May 20, 2008 | Climate and resource scarcity
For all the media comment criticising biofuels lately, you might have thought that the tide had clearly turned against the increasing trend of using crops for fuel. But you’d be wrong. In fact, as Javier Blas repoted in the FT last week, the proportion of American corn going to biofuels is going up: from 22 per cent of the crop last year to a third this time around.
The reason why is simple: oil price. With oil now at $126 – that’s up $10 just since the start of the month – and lots of analysts pondering $200 by year end, biofuels look like part of a route that leads towards energy independence. And even though corn-based ethanol is about the most idiotic substitute for oil imaginable (on a climate change as well as an energy independence basis), the truth is that in its messed-up way, it kind of works.
The proof: look at the front of today’s FT, where the headline is “US begins to break foreign oil ‘addiction’“. Foreign oil made up 57.9 per cent of imports in the first quarter of this year – as opposed to 58.2 last year. A small drop, you might think, but the Department of Energy is already forecasting a fall to 50 per cent by 2015. And here’s the grim bit:
Although the reduction in oil demand growth is partly because of slower economic growth and a projected 1m-barrel-a-day rise in output from the US’s Gulf of Mexico oil fields by 2012, experts also believe that legislation will accelerate the trend. The Energy Information Administration expects the energy act to help boost biofuel production from 8bn gallons this year to at least 32bn by 2030…
And that’s not all: even as the US starts the long hike towards weaning itself, the oil price is expected to keep on going up, as demand in China continues its ascent skywards. In the background, the International Energy Agency is warning that “the world can not easily afford to retreat from bio-fuels in spite of their possible role in driving up food prices”:
Biofuels already make up about 50 per cent of the extra fuel coming to the market from sources from outside of the Opec oil cartel this year. This explains why fears of a retreat this week helped drive oil prices to record levels. William Ramsey, deputy executive director of the IEA, said: “If we didn’t have those barrels, I am not sure where we would be getting those half a million barrels.”
Bottom line: we must not kid ourselves that we can deal with the food security issue separately from the energy security issue. They’re fundamentally intertwined in over a dozen ways – and the fact that hardly any multilateral institutions cover both energy and food is something that should worry us a lot…
