by Alex Evans | Jul 10, 2007 | Climate and resource scarcity, Global system
Usually when you see phrases like “oil crunch in five years”, you assume that you’re being addressed by a peak-oiler who is about to go on to explain to you the composition of the canned food stash that he’s secured in his attic. So when you realise that you’re actually reading the FT, and the people using the phrase are the International Energy Agency, it’s easy to do a double-take. But there it is, in black and white (well, pink):
In its starkest warning yet on the world’s fuel outlook, the International Energy Agency said “oil looks extremely tight in five years time” and there are “prospects of even tighter natural gas markets at the turn of the decade”.
The IEA said that supply was falling faster than expected in mature areas, such as the North Sea or Mexico, while projects in new provinces such as the Russian Far East, faced long delays. Meanwhile consumption is accelerating on strong economic growth in emerging countries.
The problem is exacerbated by the fact that supply from non-members of the Organisation of the Petroleum Exporting Countries will increase at an annual pace of 1 per cent, or less than half the rate of the demand rise.
The widening gap between rising consumption and lagging non-Opec supply will force Opec to sharply increase its production in the next five years.
Lawrence Eagles, head of the IEA’s oil market division, told the Financial Times: “If we get to the point were there is insufficient supply, the only way to balance the market will be through higher prices and a drop in demand.
IEA’s gloomy pronouncement comes within a week of the UN Food and Agriculture Organisation forecast of food price increases of between 20 and 50 per cent over the next decade, thanks to biofuels, climate change, water scarcity and increased demand (see GlobalDashboard’s one pager on how scarcity trends intersect here).
All of which raises the rather pertinent question: Does anyone, at either national or global level, have a plan to manage all this – or indeed clarity over whose job it is to worry about such a cross-cutting trend?
P.S. If you’re now wondering what you should have stashed in the attic: help is at hand.
by Alex Evans | Jul 7, 2007 | Climate and resource scarcity, Global system
From the FT today:
Food prices are set for a period of “significant and long-lasting” inflation because of demand from China and India and the use of crops for biofuels, according to the head of Nestlé . Peter Brabeck, chairman of the world’s largest food company, said rises in food prices reflected not only temporary factors but also long-term and structural changes in supply and demand.
The Nestlé chairman cited population growth, rising demand from “the phenomena of India and China” and the use of food products by biofuel producers as causes of pressure in international food markets.
Reports from two international organisations this week forecast food price rises of between 20 and 50 per cent over the next decade.
by Alex Evans | Jul 7, 2007 | Cooperation and coherence, Global system, Influence and networks
George Packer at the New Yorker has a terrific post asking why it is that bad news rarely seems to permeate to the top of organisations, and why those at the top often seem to know less than everyone else. He writes: “At different stages of the war, I’ve had different theories, and have sometimes held them all simultaneously:
1. They’re lying. They don’t tell the truth in public—bad for morale, bad for them—but they know.
2. Bad news doesn’t get to the top. According to Sy Hersh in this week’s New Yorker, that was General Antonio Taguba’s initial explanation for why Donald Rumsfeld claimed not to know about Abu Ghraib long after he could have read the General’s investigative report: his underlings kept it from the boss, fearing his wrath.
3. They don’t want to know, so they insulate themselves from bad news. Hersh reported that this was the real reason for Rumsfeld’s ignorance about the details of the Abu Ghraib abuses: he refused to read the report.
4. They hear bad news and then immediately dismiss it. George Tenet, on page 447 of his new memoir, offers this bit of evidence: “As early as the fall of 2003, it was becoming clear that our political and economic strategy was not working. The data were available, the trends were clear. Those in charge of U.S. policy operated within a closed loop. Bad news was ignored.”
There’s an important link here to management literature about a particular class of organisations called High Reliability Organisations – places like nuclear power stations or aircraft carrier flight decks that are both (a) inherently unsafe and yet (b) tend to have very good safety records. (For an excellent discussion of HROs, see Managing the Unexpected by Karl Weick and Kathleen Sutcliffe).
One of the features that such organisations tend to share is a preoccupation with failure, which is seen as an opportunity for learning. Weick and Sutcliffe note that,
Research shows that people need to feel safe to report incidents or they will ignore them or cover them up. Managerial practices such as encouraging questioning and rewarding people who report errors or mistakes strengthen an organisationwide culture that values reporting.
The reason: any lapse is seen within an HRO as “a signal of possible weakeness in other portions of the system”. What’s so striking about HROs’ preoccuptation with failure is that governments and foreign policy agencies tend to be organised along diametrically opposite lines: they are pathologically preoccupied with success. Junior officials in government agencies often find themselves under pressure, whether implied or explicit, to report “good news stories” up the information food chain, in order to show that the current approach is working.
While senior policymakers will, inevitably, always want to have good news to tell the outside world, it’s crucial to ensure that internal communications give the unvarnished truth – and that, in turn, relies on clear signals to officials that they will be rewarded for telling it like it is. None of this will come as news to good ministers. Conversely, a failure to remember it lies at the very heart of why the US and UK went to war in Iraq.
by David Steven | Jun 26, 2007 | Climate and resource scarcity
Chris Dodwell, a senior climate change official at the UK’s Department for Environment, Food and Rural Affairs, supports a long-term stabilisation goal. A goal is important for three reasons, he argues.
First, it gives business a long term signal. Second, it provides a guide for countries on how to cope with the change in climate that we’re all going to have to learn to live with. Finally, it tells consumers that all governments are in it together – everyone is doing their bit.
Jennifer Morgan, from E3G, disagrees. A long-term goal will not be easy to negotiate. It also focuses attention on burden sharing – how will available emissions be divided up?
by David Steven | Jun 25, 2007 | Climate and resource scarcity
Interesting differences of opinion about how serious a problem we’re facing…
Potted Bert Metz: To avoid dangerous climate change (a 2 degree increase in mean global temperature), we need to stabilise emissions by 2015 and get them back to current levels by 2040. Even if this is achieved, we’re still going to see very costly damage.
Potted Matthew Hulbert: Don’t expect a ‘seminal moment’ where climate change is definitively linked to conflict, but security is undoubtedly going to get worse. Climate change is an undoubted ‘threat multiplier’. Africa is most vulnerable, where the climate is already challenging, many people live close to the edge, and resilience is in short supply.
Potted Brahma Chellaney: Yeah it’s going to be bad, but the doomsayers are painting too black a picture. “Scaremongering makes it harder to come up with a realistic response.” The green bandwagon is already leading us down some dead ends. Biofuels, for instance, are a sop for the farm lobby, but will push food prices higher and harm the poor. Innovation and ingenuity are the answer. (more…)
