January 04, 2008
|Peak Food||Development Environment Future|
A new crisis is emerging, a global food catastrophe that will reach further and be more crippling than anything the world has ever seen. The credit crunch and the reverberations of soaring oil prices around the world will pale in comparison to what is about to transpire, Donald Coxe, global portfolio strategist at BMO Financial Group said at the Empire Club's 14th annual investment outlook in Toronto on Thursday.
"It's not a matter of if, but when," he warned investors. "It's going to hit this year hard."
Mr. Coxe said the sharp rise in raw food prices in the past year will intensify in the next few years amid increased demand for meat and dairy products from the growing middle classes of countries such as China and India as well as heavy demand from the biofuels industry.
"The greatest challenge to the world is not US$100 oil; it's getting enough food so that the new middle class can eat the way our middle class does, and that means we've got to expand food output dramatically," he said.
The impact of tighter food supply is already evident in raw food prices, which have risen 22% in the past year.
Mr. Coxe said in an interview that this surge would begin to show in the prices of consumer foods in the next six months. Consumers already paid 6.5% more for food in the past year.
Wheat prices alone have risen 92% in the past year, and yesterday closed at US$9.45 a bushel on the Chicago Board of Trade.
At the centre of the imminent food catastrophe is corn - the main staple of the ethanol industry. The price of corn has risen about 44% over the past 15 months, closing at US$4.66 a bushel on the CBOT yesterday - its best finish since June 1996.
This not only impacts the price of food products made using grains, but also the price of meat, with feed prices for livestock also increasing.
"You're going to have real problems in countries that are food short, because we're already getting embargoes on food exports from countries, who were trying desperately to sell their stuff before, but now they're embargoing exports," he said, citing Russia and India as examples.
"Those who have food are going to have a big edge."
With 54% of the world's corn supply grown in America's mid-west, the U.S. is one of those countries with an edge.
But Mr. Coxe warned U.S. corn exports were in danger of seizing up in about three years if the country continues to subsidize ethanol production. Biofuels are expected to eat up about a third of America's grain harvest in 2007.
The amount of U.S. grain currently stored for following seasons was the lowest on record, relative to consumption, he said.
We've got some big, snowballing trends bearing down on us: peak oil, peak water, peak grains, peak fish, peak topsoil. Just coasting along on the path of least resistance isn't going to be good enough. Not even close.
January 02, 2008
|Fillin' 'Er Up With Other People's Food||Development Energy Environment Ethics Future Peak Oil|
$100 oil prices poor folks out of the market for energy. But worse than that, it prices them out of the market for food. It's already happening. IHT:
In an "unforeseen and unprecedented" shift, the world food supply is dwindling rapidly and food prices are soaring to historic levels, the top food and agriculture official of the United Nations warned [December 17].
The changes created "a very serious risk that fewer people will be able to get food," particularly in the developing world, said Jacques Diouf, head of the UN Food and Agriculture Organization.
The agency's food price index rose by more than 40 percent this year, compared with 9 percent the year before - a rate that was already unacceptable, he said. New figures show that the total cost of foodstuffs imported by the neediest countries rose 25 percent, to $107 million, in the last year.
At the same time, reserves of cereals are severely depleted, FAO records show. World wheat stores declined 11 percent this year, to the lowest level since 1980. That corresponds to 12 weeks of the world's total consumption - much less than the average of 18 weeks consumption in storage during the period 2000-2005. There are only 8 weeks of corn left, down from 11 weeks in the earlier period.
Prices of wheat and oilseeds are at record highs, Diouf said Monday. Wheat prices have risen by $130 per ton, or 52 percent, since a year ago. U.S. wheat futures broke $10 a bushel for the first time [December 17], the agricultural equivalent of $100 a barrel oil.
Diouf blamed a confluence of recent supply and demand factors for the crisis, and he predicted that those factors were here to stay. On the supply side, these include the early effects of global warming, which has decreased crop yields in some crucial places, and a shift away from farming for human consumption toward crops for biofuels and cattle feed. Demand for grain is increasing with the world population, and more is diverted to feed cattle as the population of upwardly mobile meat-eaters grows.
"We're concerned that we are facing the perfect storm for the world's hungry," said Josette Sheeran, executive director of the World Food Program, in a telephone interview. She said that her agency's food procurement costs had gone up 50 percent in the past 5 years and that some poor people are being "priced out of the food market."
To make matters worse, high oil prices have doubled shipping costs in the past year, putting enormous stress on poor nations that need to import food as well as the humanitarian agencies that provide it.
"You can debate why this is all happening, but what's most important to us is that it's a long-term trend, reversing decades of decreasing food prices," Sheeran said.
Climate specialists say that the vulnerability will only increase as further effects of climate change are felt. "If there's a significant change in climate in one of our high production areas, if there is a disease that effects a major crop, we are in a very risky situation," said Mark Howden of the Commonwealth Scientific and Industrial Research Organization in Canberra.
Already "unusual weather events," linked to climate change - such as droughts, floods and storms - have decreased production in important exporting countries like Australia and Ukraine, Diouf said. [...]
Sheeran said, that on a recent trip to Mali, she was told that food stocks were at an all time low. [...]
[R]ecent scientific papers concluded that farmers could adjust to 1 degree Celsius (1.8 degrees Fahrenheit) to 3 degrees Celsius (5.4 degrees) of warming by switching to more resilient species, changing planting times, or storing water for irrigation, for example.
But that after that, "all bets are off," said Francesco Tubiello, of Columbia University Earth Institute. "Many people assume that we will never have a problem with food production on a global scale, but there is a strong potential for negative surprises." [...]
Part of the current problem is an outgrowth of prosperity. More people in the world now eat meat, diverting grain from humans to livestock. A more complicated issue is the use of crops to make biofuels, which are often heavily subsidized. A major factor in rising corn prices globally is that many farmers in the United States are now selling their corn to make subsidized ethanol.
The world's food stocks are rapidly shrinking. Could anything be more fundamental? And yet there is almost no awareness of this situation in the world's wealthier nations.
By being energy hogs, we make other people go hungry. It's really that simple. Picture it next time you fill your tank: some of what's going in there is other people's food. Either directly, in the form of ethanol from corn, or indirectly, because our profligate energy use drives prices up and fuels global warming. This is a central moral issue of our time: will we in the world's wealthier nations continue to use our wealth to maintain a way of life that is increasingly deadly to everyone else on the planet? In other words, will we make other people starve so we can drive our SUV to the mall?
July 23, 2007
Imagine if everyone in the world had access to a quality education, quality books, quality tools. So much human potential waiting to be unleashed. Which is why the One Laptop Per Child project should have tectonic effects. It's not the computer so much as the Internet access it brings, which, in turn, opens up access to the knowledge of all humanity.
Cause for joy.
July 05, 2007
|Making Do In Uganda||Development|
A remarkable and hopeful feature of technology adoption in the Third World is the ability of Third World countries to "leapfrog." For example, where First World countries had to go through a lengthy (and enormously expensive) period of building out telephone land lines, Third World countries can go directly to cell phones.
In many poor countries, however, considerable ingenuity is required. What do you do, for example, when there is no electrical service? Future Perfect (via OilDrum) has some unforgettable photos from Uganda.
You've got a cell phone, how do you keep it charged?
Street vendor providing cell phone charging services in Kampala: PowerPoint PDF
How do you get electricity to use at home?
Rural battery charging service PowerPoint PDF
What if people are too poor to afford their own phones?
Village phone, Uganda: PowerPoint PDF
Follow the links and see all the photos. The gap between rich countries and poor ones is simply staggering.
April 14, 2007
|Neocons Of The Raj||Development|
Salon quotes from an article by historian William Dalrymple that compares British policies in India with the imperial dreams of American neocons. Dalrymple's whole article is not available online, unfortunately. This passage, though, is arresting:
In 1600, when the East India Company was founded, Britain was generating 1.8 percent of the world's GDP while India was producing 22.5 percent. By 1870, at the peak of the Raj, Britain was generating 9.1 percent, while India had been reduced to a poor third-world nation, a symbol across the globe of famine and deprivation.
Today, things are slowly returning to their traditional pattern. Last year the richest man in the UK was for the first time an ethnic Indian, Lakshmi Mittal, and last month news has come that Britain's largest steel manufacturer, Corus, has jsut been brought by Tata, an Indian company. Extraordinary as it is, the rise of India and China, seen from the wider perspective, is merely the rebalancing of the ancient equilibirum of world trade, with Europeans no longer appearing as gun-toting, gunboat-riding colonial masters but instead reverting to their traditional role — eager consumers of the much-celebreated manufactures, luxuries, and services of the East. [Emphasis added]
India was producing nearly a quarter of the world's economic activity before the British got their hands on her and sucked her dry. Astonishing. To this day, the Western imagination features a backward India that benefitted from British know-how and administration. British intervention then, like American intervention today, was well-intentioned, even if a bit misguided. The impulse is benevolent, any negative consequences entirely accidental. Spreading democracy, and all that. Right.
(By the way, the Wikipedia article on Dalrymple mentions this fact: in the 18th and early 19th century, one in three British men was married to an Indian woman. Astounding, if true. The things that are left out of the history we learn at school.)
January 20, 2007
|Poverty Is A Security Issue||Development War and Peace|
Economist Jeffrey Sachs, leading light of the UN's Millenium Development Goals project, points out that eradicating poverty is in the security interest of the world's rich nations. Poverty creates instability, conflict, and war. Reuters:
Curbing poverty in Third World countries will not only satisfy life and death needs for the poor but also provide security for rich nations, one of the world's best-known economists said on Wednesday.
Jeffrey Sachs, special adviser to the United Nations on the Millennium Development Goals, said extreme poverty was fuelling conflicts in places such as Somalia and Sudan's Darfur region.
"Instability will grow where poverty festers in an extreme form, that's what we're seeing in the Horn of Africa. This isn't a crisis about Islam, this isn't a crisis about geopolitics, this is essentially a crisis of extreme poverty," Sachs said.
"Whether it's Darfur or Somalia or other conflict regions, people are in conflict because they're so poor they cannot stay alive — that's what needs to be addressed for security for rich countries," he told a news conference in Nairobi.
Sachs said it was targeted investments in tools like mosquito nets, medicines and fertilisers that would help in the fight against poverty.
"Africa's small-holder farmers could double or triple their crop yield within even a single season if they have access to improved inputs," he said. [Emphasis added]
Unfortunately, rich nations make an enormous amount of money supplying arms to the world — which makes for a conflict of interest, to put it mildly. The US is the biggest arms dealer by far, but all five permanent members of the UN Security Council are heavily involved. And nearly half of weapons exports go to the developing world. While instability may not be in the interest of the US population as a whole, it is very much in the interest of enormously powerful sectors of US society. Ditto for the world's other rich nations. War is big business; poverty reduction, not so much.
One more example of capitalism's fatal flaw — profitability is a poor, in fact a potentially suicidal, organizing principle for human activity: it may well be more profitable to destroy the world than to save it, and it may well be more profitable to kill people than to make them prosper. The free market can be very good at working out how to make something, but it's often not good at all at determining what to make. Actually, it's often not so good at the how either, since it fails to take account of environmental destruction and other so-called "externalities" that are left out of profitability calculations. So people can devote enormous energy and resources to making weapons, creating all sorts of toxic waste in the process, and, from the perspective of mainstream economics, their activity is entirely rational — more rational, in fact, than working for peanuts to help poor people lift themselves up. A crazy notion of "rationality," that.
October 31, 2006
|Peak Grains||Corporations, Globalization Development Environment|
The world is running dangerously low on grains, writes Wayne Roberts at Energy Bulletin:
Now's the time to brace yourself for major price hikes in food, as peak grains join the lineup of lifestyle-changing events along with peak oil and peak water.
Unless this year's harvest is unexpectedly different from six out of the last seven years, the world's ever-decreasing number of farmers do not produce enough staple grains to feed the world's ever-increasing number of people. [...]
Whenever there's a shortfall in the amount of food produced in any given year, it's possible to dip into an international cupboard or "reserve" of grains (wheat, rice and corn, for example) left over from previous years of good harvests. [...]
The world's grain reserve has been dipped into for six of the last seven years, and is now at its lowest point since the early 1970s. There's enough in the cupboard to keep people alive on basic grains for 57 days. Two months of survival foods is all that separates mass starvation from drought, plagues of locusts and other pests, or wars and violence that disrupt farming, all of which are more plentiful than food.
To put the 57 days into geopolitical perspective, China's shortfall in wheat is greater than the entire wheat production of Canada, one of the world's breadbaskets. Since the World Trade Organization prohibits government intervention that keeps any items off the free trade ledger, there's no law that says that Canadians, or any other people, get first dibs on their own food production.
To put the 57 days in historical perspective, the world price for wheat went up six-fold in 1973, the last time reserves were this low. Wheat prices ricocheted through the food supply chain in many ways, from higher prices for cereal and breads eaten directly by humans, to the cost for milk and meat produced from livestock fed a grain-based diet. If such a chain reaction happens this year, wheat could fetch $21 a bushel, again about six times its current price. It might fetch even more, given that there are two other pressing demands for grains that were not as forceful during the 1970s. Those happy days pre-dated modern fads such as using grains as a feedstock for ethanol, now touted as an alternative to petroleum fuels for cars, and pre-dated factory barns that bring grains to an animal's stall, thereby eliminating farm workers who tended livestock while they grazed in fields on pasture grasses. [Emphasis added]
There's a perfect storm brewing: peak oil, peak water, peak grains, peak fish — the latter three exacerbated by global warming.
May 03, 2006
|Prosperity's Ax||Development Environment|
We wonder what the Easter Islanders thought about as they cut down the last few trees on their island. Who can say? Perhaps they were no more conscious of the consequences of their actions than we are of ours. NYT:
The Indonesian government has signed a deal with China that will level much of the remaining tropical forests in an area so vital it is sometimes called the lungs of Southeast Asia.
For China, the deal is a double bounty: the wood from the forest will provide flooring and furniture for its ever-expanding middle class, and in its place will grow vast plantations for palm oil, an increasingly popular ingredient in detergents, soaps and lipstick.
The forest-to-palm-oil deal, one of an array of projects that China said it would develop in Indonesia as part of a $7 billion investment spree last year, illustrates the increasingly symbiotic relationship between China's need for a wide variety of raw materials, and its Asian neighbors' readiness to provide them, often at enormous environmental cost. [...]
From Indonesia to Malaysia to Myanmar, many of the once plentiful forests of Southeast Asia are already gone, stripped legally or illegally, including in the low-lying lands here in Kalimantan, on the Indonesian side of Borneo. Only about half of Borneo's original forests remain. [...]
Over all, Indonesia says it expects China to invest $30 billion in the next decade, a big infusion of capital that contrasts with the declining investment by American companies here and in the region.
Much of that Chinese investment is aimed at the extractive industries and infrastructure like refineries, railroads and toll roads to help speed the flow of Indonesia's plentiful coal, oil, gas, timber and palm oil to China's ports. [...]
The decision to award a $1 billion [wood] concession to China will "increase the deforestation of Papua," a place of extraordinary biodiversity, said Elfian Effendy, executive director of Greenomics, an Indonesian environmental watchdog. "It's not sustainable." [...]
Indonesia's environmentalists, and some economists, say chopping down as much as 4.4 million acres of the last straight-stemmed, slow-growing towering dipterocarp trees on Borneo would gravely threaten this region's rare ecosystem for plants, animals and people.
Maps for the project have aroused fears that it would encroach into the forest in Kayan Mentarang National Park, where the intoxicating mix of high altitude and equatorial humidity breeds an exceptional diversity of species, second only to Papua's, biologists say.
The area is the source of 14 of the 20 major rivers on Borneo, and the destruction of the forests would threaten water supplies to coastal towns, said Stuart Chapman, a director at the World Wildlife Fund in Indonesia. [...]
For years, Mr. Anyie, the Dayak elder, said he had resisted offers from commercial contractors to cut down the forest around his village. [...]
He worked hard, too, to keep the old ways of life. [...]
But now it is time for change, he said. "People have told me, 'Wood is gold, you're still too honest,'" said Mr. Anyie, a diminutive man with brush-cut black hair.
His own grown children have deserted the village for big towns, and the villagers left behind are tired of traveling everywhere by foot (three days to neighboring Malaysia where jobs in palm oil plantations are plentiful) or by traditional long boats powered by anemic 10-horsepower engines. [...]
Until now, the forests at these higher elevations have been protected by their sheer inaccessibility. To get back to the coast from the research station, for instance, takes a 15-hour journey along a 350-mile stretch of the Bahau and Kayan Rivers in a wooden longboat powered by three outboard motors.
In contrast, the forests in lowland Kalimantan, where roads have been hacked into the land already, are so ravaged by logging that they will have disappeared by 2010, the World Bank says.
As the roads start penetrating the area of Mr. Anyie's clan, the upland forests will begin to disappear here, too. The solution is to adopt sustainable management plans, Mr. Wulffraat said.
Such plans allow logging only in specially certified areas, he said. But so far, he said, they have proved a losing proposition.
"In about 30 years," Mr. Anyie said, "the forest will be gone." [Emphasis added]
The NYT's headline for the article is "Forests in Southeast Asia Fall to Prosperity's Ax." It's a mighty strange notion of prosperity, when what is happening is so clearly unsustainable. It's a one-shot deal that'll all be over in a few decades. Then what?
We need a notion of prosperity that isn't built on stealing from our descendants. Prosperity for posterity.
December 20, 2005
Taking a momentary break from Snoopgate, here's some positive news. Clean drinking water is an enormous problem for many of the world's poorest people. Low-tech, decentralized solutions (like this) are what's needed. From WorldChanging, here's a beautiful example — a low-tech invention that turns salt water into fresh water:
One of the easiest tools for making brackish or sea water usable requires little more than sunlight and time — the Watercone.
Made of a rugged, transparent plastic, the Watercone is incredibly easy to use: fill up the base plate with salt water, place the cone over the plate, and wait. 24 hours later, a trough around the edge of the cone will contain 1-1.5 liters of fresh water, produced by evaporation/condensation. Pour the water out, and start again.
The simplicity of it. Just beautiful.
November 29, 2005
|Clean Water For The World's Poor||Development|
The Senator Paul Simon Water for the Poor Act of 2005 "puts water as a top priority and a cornerstone for foreign aid," and will get clean water "to people in greatest need," said Camille Osborne, director of public affairs for Water Advocates, a Washington, D.C.-based non-governmental organization (NGO).
Named after the late Senator Paul Simon (D-IL), a water safety trailblazer, the House overwhelmingly passed the Water for Poor Act in early November and the Senate unanimously followed suit on November 16. [...]
"Water-related illnesses and disease are the number one cause of death in the world," according to Osborne.
On average, about 3,900 children die every day because of water-borne illnesses, often after drinking from holes in the ground where water has been stagnant. That means that every 15 seconds, one child dies due to a lack of access to safe water and sanitation.
The Act expresses the need to make more money available for water and sanitation programs by amending the 1961 Foreign Assistance Act, and charges the State Department with pinpointing high-need areas.
Under the bill, the Secretary of State must develop a strategy with specific timetables, benchmarks, and goals to bring together all federal water programs. [...]
While the United States Agency for International Development (USAID) put about $500 million into water projects around the world last year, much of that assistance went to Jordan, Egypt, the West Bank, and Gaza. [...]
Under the Act, the Congressional Budget Office expects U.S. government funding to Sub-Saharan Africa, Asia, and Latin America to double, with $50 million going to Africa. [...]
Other water groups also commended the bill, but warned that new money should be spent on small, on-the-ground projects that will truly reach the 1.2 billion people without access to clean water. [...]
"There will have to be thousands of little micro-projects around the world that are working with these impoverished communities. Thats what's going to start to make an impact on that 1 billion figure," Sauer told OneWorld.
Another concern for safe water advocates is that monies go to people and groups already working on the ground, and don't disappear into foreign bureaucracies. [...]
There are various "simple" ways to protect groundwater, said Brown, like building shallow, closed-off wells.
For about $2,500 — more than most communities can afford — locals can establish protected wells capable of providing clean water to some 1,000 people. [...]
Besides causing over 80 percent of illnesses in the developing world, unclean water is widely understood to impact education, economic development, poverty, women's empowerment, conflict, and environmental sustainability.
The Water for Poor Act shifts the United States closer to meeting its commitments to halve the percentage of people in the world without access to water and sanitation by 2015, a promise it made back in 2002 along with 184 other countries that agreed to pursue the United Nations' Millennium Development Goals. [Emphasis added]
This is better than nothing, but the world water situation is scandalous. In much of sub-Saharan Africa, for example, only a half to two-thirds of the population has access to clean water. Too often, when foreign aid money is allocated to water projects, it's spent on mega-projects that are wildly inappropriate for the host country and doomed to fail. What's needed are large numbers of small, inexpensive wells, not billion-dollar water treatment complexes. The cost of the war in Iraq could have provided clean water for the whole world many times over.
It's difficult to prove, but it may be that the true number of deaths due to unclean water is significantly understated. In sub-Saharan Africa, for example, much of what is categorized as AIDS may well be due instead to the effects of unclean water. If a person with chronic diarrhea and wasting (common symptoms of water-borne disease) has HIV antibodies — or, more commonly, is presumed to have HIV antibodies, HIV tests being too expensive to be performed in the majority of cases — that person is classified as having AIDS. Sub-Saharan Africa, which is the worst region in the world for clean water, is also the region of the world with the most AIDS cases. That proves nothing, but it's worth thinking about it. Health workers with an AIDS mindset may presume AIDS in cases where unclean water is the root problem: to the man with a hammer, the whole world looks like a nail. Why is this important? If we misjudge the cause of disease, we cannot treat it successfully.