by Alex Evans | Jul 24, 2008 | Climate and resource scarcity, Conflict and security, Cooperation and coherence
As a general rule of thumb, my starting assumption is that we need new multilateral agencies like we need a hole in the head. But if there’s an exception to that rule, then energy has a pretty good claim to be it. As I argue in Multilateralism for an Age of Scarcity, there is no multilateral agency with a mandate to look at all aspects of the issue:
The International Energy Agency is supposed to represent major consumer countries, but its 27 members are all OECD countries – hence leaving out key emerging economies including China and India. Although the Organisation of the Petroleum Exporting Countries (OPEC) is generally thought of as the major body representing producer states, in fact well over half of the world’s oil is produced by non-OPEC countries. Yet the most fundamental incoherence on energy is the obvious one: that with consumer and producer states represented by two different institutions in two different cities, it is wholly unclear where any discussions about a comprehensive approach encompassing both producer and consumer interests would take place.
Now, IAEA head Mohamed ElBaradei has written a piece in the FT which starts from the same analysis, and goes on to argue that a new global energy organisation is indeed needed. What would it do?
“complement, not replace, bodies already active in the energy field … bring a vital inter-governmental perspective to bear on issues that cannot be left to market forces alone, such as the development of new energy technology, the role of nuclear power and renewables, and innovative solutions for reducing pollution and greenhouse gas emissions”;
“provide authoritative assessments of global energy demand and supply and bring under one roof energy data that are now dispersed and incomplete … speed the transfer of appropriate energy technology to poor countries and give them objective advice on an optimal energy mix that is safe, secure and environmentally sound”;
“develop a global mechanism to ensure energy supplies in crises and emergencies, and help countries run their energy services and even do it for them temporarily after a war or natural disaster … co-ordinate and fund research and development, especially for energy-poor countries whose needs are often overlooked by commercial R&D.”
He concludes, “the need for joint action to develop long-term solutions to the looming energy crisis is now undeniable. It is difficult to see how this can be done without an expert multinational body, underpinned perhaps by a global energy convention, with the authority to develop policies and practices to benefit rich and poor countries alike, equitably and fairly”.
So what to make of this call? A few thoughts.
First, I can’t see much in the first two paragraphs that isn’t already done by the IEA – with the possible exception of advising poor countries on their energy mix, which agencies including UNDP and the Bank already cover. True, most publicly available data on oil reserves is pretty suspect; but this new agency wouldn’t obviate that problem (which stems from internal machinations within OPEC).
The interesting element here is the idea of a global mechanism to ensure energy supplies in crises and emergencies (what could the head of the IAEA be thinking of?). When I was drafting Multilateralism for an Age of Scarcity, this seemed to me one of the real gaps in current multilateral capacities – both for dealing with short term spikes (attack on Iran leads to $200 oil) and long term stresses (peak oil). In those conditions, a regime for sharing access to what supplies there are will be essential for reducing the risk of competition and friction, and for providing (at least a degree of) predictability, to reduce wild market swings as much as can be.
What I think is missing from ElBaradei’s proposal is a proper account of where food fits in. There are plenty of major reasons why food prices and energy prices are ever more closely in synch: biofuels, input costs (especially fertiliser), and the fuel used to cultivate land, harvest crops, process, refrigerate, ship and distribute them. If energy costs keep going up over the long term (as looks likely, recent sharp falls notwithstanding), then food prices will do the same – making it more important than ever to effect a far more integrated international approach.
by Alex Evans | Jul 7, 2008 | Climate and resource scarcity, Influence and networks
Gordon Brown’s blunt call on Brits to stop wasting food marks an interesting moment in the food prices debate.
So far, policymakers have concentrated almost entirely on the supply side – specifically, with the need to increase food production by 50 per cent by 2030, in line with World Bank demand forecasts. (I worry that too much focus on the overall quantum of food produced risks obscuring the equally fundamental issue of who has access to it – but let’s leave that aside for now.)
What Brown’s emphasis on waste does is to give the demand side of the equation equal billing – a position it’s deserved all along, but hasn’t received from policymakers, presumably due to anxieties about implying that consumers may have to change behaviour.
The issue of food waste is a massive issue in its own right – the UK wastes 4 million tonnes of food a year, and the forthcoming Prime Minister’s Strategy Unit report on food says that up to 40 per cent of food harvested in developing countries can be lost before it’s consumed. But its long term significance may be as a bridgehead for opening up a broader front on demand reduction: as the food equivalent of energy efficiency, if you like.
Another of the battles in that front will be over biofuels – a major new source of demand for crops. The leak last week of an internal World Bank document showed just how significant biofuels have been: it argued that biofuels have been responsible for as much as 75% of food price increases – way more than the 30% previously estimated by the International Food Policy Research Institute. (The Bank’s 75% figure isn’t new – it’s been kicking around their HQ for at least three months – but its release now will definitely increase pressure on the US to reduce subsidies for corn-based ethanol.)
But what I think’s most significant of all about Brown’s new tack is that it makes him the first head of government to talk clearly about the elephant in the room with food prices: the fact that our diet in developed countries has a direct effect on the food security of poor people in developing countries. Waste may be the first stop – but the train line we’re on leads directly to the question of how much meat and dairy products we can consume without impinging on others’ fair shares.
by Alex Evans | Jun 30, 2008 | Climate and resource scarcity, Cooperation and coherence, East Asia and Pacific, Economics and development, Global system
So, with a week to go until Japan’s G8 in Hokkaido, how are things looking? If you want the comprehensive answer, you should head straight for Jenilee Geubert’s excellent dossier on the website of the University of Toronto’s G8 research group – but here are a few highlights.
First, climate change. A draft communique seen by Dow Jones suggests there are four options on the table: a 50% emissions reduction by 2050 [from what year’s level isn’t specified]; an unspecified percentage cut by 2050; a 50% cut by 2051 or later; or a more than 50% cut by 2051 or later.
If you’re wondering where the magical figure of 50% comes from, it’s from the IPCC estimate of what it’ll take to limit average temperature rises to between 2.0 and 2.4 Celsius – though note that (a) the IPCC says 50 to 85%, and (b) that this is before the [rapid] rate of sink failure is taken into account. So 50% by 2050 is already too low.
Fukuda has said that the G8 will not aim to set medium term targets. Tony Blair’s big new report says it must. So does Avaaz. The US says a 25-40% cut by 2020 is “frankly not do-able“. The US is meanwhile extolling the benefits of its Major Economies Meeting, but last week’s MEM in South Korea didn’t go so great.
Next: energy. Oil’s just flown past $143 on the back of geopolitical tensions, so all the signs are that the issue will be charged when leaders gather next week. Fukuda wants to see more oil production, but after Saudi Arabia’s pledge of only 200,000 more barrels a day last week, it’s hard to see much sign of it – and even harder to detect any sign of join-up between Fukuda’s calls for OPEC to open the tap up a bit more, and Japan’s stated goal of something called a “Cool Earth“.
Meanwhile, biofuels might conceivably also come up, as Fukuda’s not a fan (“it is a fact that the production of bioethanol in some cases compete with food production”) – though Japan will want to avoid putting its American buddies on the spot. For its part, the US will point to IEA data that shows that biofuels have become crucial for meeting marginal oil demand (want to know how much non-OPEC oil supply growth is from biofuels this year? 63 per cent.)
And then there’s food. Sir John Holmes’s UN task force will be presenting its final report at the Summit. Leaders will probably pledge to do everything they can to increase food production and increase investment in agriculture – which is a good idea, though it does still leave the small fact that enough food is produced for everyone to eat today, but there are still 850-950 million undernourished people. Increasing yields isn’t the whole story.
One thing the G8 leaders could do is issue a strong statement of intent on the Doha trade round – and perhaps, if they want to be really relevant, taking security of supply issues into account at the same time. More generally, World Bank President Bob Zoellick’s ten point plan on food prices will doubtless be referred back to as a good and brief overview of the challenges – worth having another look at that ahead of the summit.
All in all, the three scarcity issues of climate, energy and food will dominate centre stage at Tokayo. It’s welcome that the G8 is focusing on them, but unclear that G8 leaders know what kinds of deal they should be agreeing on them – or how to get there. And G8 leaders also appear not to have figured out yet that scarcity issues are uniquely integrated, while the multilateral response to them is anything but. More on that over the course of this week…
by Alex Evans | Jun 26, 2008 | Climate and resource scarcity, Global system, Influence and networks
A few weeks back, I wrote a post about Abengoa – a biofuels company which has been taking out full page ads in the FT and elsewhere, arguing that biofuels are nothing to do with rising food prices (an argument that calls to mind the image of Lt. Frank Drebbin in The Naked Gun, standing before an exploding fireworks factory and calling through a loudhailer “Move on! There is nothing to see here!”). As I said at the time, Abengoa’s ad campaign was pure cornwash.
So it’s with great satisfaction that I pass on news of the following letter in the Financial Times today:
Sir, in an advertisement in the FT on June 18, Abengoa Bioenergy stated that “Bioethanol is currently the only real alternative for eliminating our addiction to oil”, citing our report “Greenhouse Gas Emissions from Transport in the EU25 (2004)” as one of two sources to justify that claim.
It is impossible for a reader of our report to reach the conclusion Abengoa draws. It does not even mention biofuels or bioethanol. If the company is genuinely interested in “supported evidence”, as it claims, it must know that T&E’s view on biofuels bears no resemblance to its own. T&E has consistently warned against volume targets for biofuels at European Union level since at least 2004, when we published our report “Sense and Sustainability”. We believe Europe should set an environmental target to cut greenhouse gas emissions from the production of all transport fuels, not a biofuels quantity target that gives a boost to the fuels Abengoa produces regardless of their environmental performance.
Running Europe’s fleet of heavy, gas-guzzling cars on biofuels rather than petrol is no cure. If Europe truly wants to end its addiction to oil, it should start by making cars twice as fuel-efficient as they are today.
Abengoa has misused our name and research in an advertisement claiming to separate “manipulation” from “evidence”. That is reprehensible. As an environmental group, our main capital is our reputation and credibility, which we will defend.
Jos Dings,
Director,
European Federation for Transport and Environment (T&E),
B-1000 Brussels, Belgium
Wow. What a truly monumental PR cock-up by Abengoa. They probably retain the same PR firm as the PRC.
by Alex Evans | Jun 20, 2008 | Climate and resource scarcity, Global system, North America
If there’s a silver lining to the disastrous flooding in the US mid-west, then this might be it. As prices for corn go through the roof, the impacts of diverting so much of it to ethanol production – expectations before the flooding were of fully a third of this year’s crop – are leading to an increasingly determined push-back from the US food industry.
Of course, the effects of corn-based ethanol on food prices aren’t exactly a newsflash: Mexico City saw riots on this very subject back in February 2007, well before food prices had reached the top of the global agenda. But the extreme weather event that the US midwest is now experiencing shifts the intensity of debates up by at least two gears.
At present, the FT reports, US biofuel rules require 9 billion gallons of biofuels to be blended into transport fuels this year – mostly with corn-based ethanol. But the US Environmental Protection Agency can – if it chooses – waive the requirement. Texas has asked it to do just that – and food producers, as they watch their costs rocket – are asking it to do the same nationally. As one food company chief puts it, “it is not fair to expect us to compete with a government-subsidised market”. It’s a fair point.
As readers will already be aware, the importance of corn to the US food economy goes far, far beyond cornflakes and tins of Green Giant sweetcorn. If you haven’t already done so, read Tim Flannery’s excellent NYRB article from last summer entitled “We’re living on corn!” – he’s not kidding:
[Michael] Pollan gives us the example of the chicken nugget, which he says “piles corn upon corn: what chicken it contains consists of corn” (because the chickens are corn-fed), as does “the modified corn starch that glues the thing together, the corn flour in the batter that coats it, and the corn oil in which it gets fried. Much less obviously, the leavenings and lecithin, the mono-, di-, and triglycerides, the attractive golden coloring, and even the citric acid that keeps the nugget ‘fresh’ can all be derived from corn.
So dominant has this giant grass become that of the 45,000-odd items in American supermarkets, more than one quarter contain corn. Disposable diapers, trash bags, toothpaste, charcoal briquettes, matches, batteries, and even the shine on the covers of magazines all contain corn. In America, all meat is also ultimately corn: chickens, turkeys, pigs, and even cows (which would be far healthier and happier eating grass) are forced into eating corn, as are, increasingly, carnivores such as salmon.
If you doubt the ubiquity of corn you can take a chemical test. It turns out that corn has a peculiar carbon structure which can be traced in everything that consumes it. Compare a hair sample from an American and a tortilla-eating Mexican and you’ll discover that the American contains a far larger proportion of corn-type carbon. “We North Americans look like corn chips with legs,” says one of the researchers who conducts such tests.
And of course, turning food into fuel is only half the story: for America’s love affair with corn is also the tale of turning fuel into food – on a truly epic scale. In the US, according to academics David Pimentel and Mario Giampietro, even back in 1994 the equivalent of 400 gallons of oil was expended each year to feed each US citizen. Meanwhile, another study – this time of Canadian farms – gives an idea of how this energy use breaks down:
– 31%: manufacture of inorganic fertiliser
– 19%: operating field machinery
– 16%: transportation
– 13%: irrigation
– 8%: raising livestock (not including feed)
– 5%: crop drying
– 5%: pesticide production
Now, you may be wondering: if it takes this much energy to produce corn, how can it make sense then to use that corn as an energy source? Wouldn’t that seem, not to put too fine a point on it, wantonly defiant of the laws of thermodynamics? Alas, it would. Indeed, studies show that the energy-returned-on-energy-invested (EROEI) of corn is actually negative: corn ethanol requires 29 per cent more energy to grow than what you can get out of it.
Rewind! One more time: corn ethanol requires 29 per cent more energy to grow than what you can get out of it. You may have seen some pretty mad subsidies in your time, but I’ll wager that none tops this; watching America tie itself in knots thus, one can’t help but feel an awestruck respect for the thunderous public affairs capacity of the US farm lobby.
Still, as we watch the US farm lobby and the US food lobby start to join battle, one might reflect that neither is clearly doing many favours for the public interest. Corn-based ethanol may be an obviously stupid policy. But it’s hard to see a diet as rich in red meat, saturated fat and processed food (all derived from corn) as is America’s, as being much more sensible – especially given that the globalisation of that diet is the number one driver of rising global food prices.
