The window of opportunity on scarcity issues starts to close (updated x3)

I’ve said before that the easing of oil and food prices that followed the credit crunch and the global downturn gave policymakers a window of opportunity to take preventive action on scarcity issues. Now, alas, I think that window is starting to close – without their having done much about it.

To see why, first take a look at what the oil price has been doing over the last year (Brent crude futures, $/barrel; h/t BBC):

Oil_price_12months

Then, put that against the longer term background of what’s been happening since 2000 (slightly older data here, via Mongabay, but usefully puts the BBC graph above in context):

oil_10_yrs

As the second graph shows, today’s level of just under $80 per barrel already brings us back to where we were in around July 2007 – and that’s during a still shaky recovery from what’s generally agreed to have been the worst global recession since the early 1930s.

This is a striking rebound in such weak economic conditions – and calls to mind the consistent warnings from the IEA over the past 18 months that the collapse in investment in new supply during the financial crisis and subsequent downturn has set the stage for a new oil price crunch as soon as recovery gets underway (not to mention the fact that IEA’s chief economist thinks we’re looking at peak oil as soon as 2020).

With the oil price headed upwards, food prices can be expected to follow – because higher oil prices make biofuels more attractive, and raise the prices of on-farm energy use, fertilisers, transportation, distribution and various other elements of our energy-intensive food supply chains.

Sure enough, if we take a look at the latest FAO food price index, we find that it too has been quietly heading upwards over the last few months – and is now likewise back at where it was in July 2007. At that point, of course, the food spike was already well underway, with the tortilla riots in Mexico City that served as a wake-up call for many policymakers having come almost six months earlier.

FAO_index_1009

On top of this, remember the really key point that the fall in food prices that took place during the global downturn gave minimal respite to the world’s poorest people – precisely because even as prices fell, they were also getting hammered themselves by the downturn.

The starkest indication of that is in the global total of undernourished people (shown here in a graph from the FT); when you realise that we haven’t just lost the progress of the last few years, but are in far worse shape that at any time since the last 60s, you start to see just what a catastrophe the combination of  food / fuel price spike followed by global downturn has been for development:

FT_undernourished

As I’ve argued in numerous previous posts, we were never out of the woods on the food / fuel pincer movement; it was the collapse in prices following the credit crunch that was the blip, not the price spike that preceded it. And what’s most frustrating now is the extent to which policymakers have frittered away the chance we had to get onto a more secure footing.

(more…)

On the web: Bernanke’s reappointment, al-Megrahi’s release, foreign policy realism, the “perfect storm”, and more…

– With the news that President Obama has nominated Ben Bernanke for a second term, over at the New Republic Noam Scheiber assesses the merits of continuity at the Fed. Stephen Roach, meanwhile, examines the case against the incumbent chairman, arguing that Obama’s decision should open a “broader debate over the conduct and role of US monetary policy”.

– Taking us back to the depths of last September’s financial meltdown, Faisal Islam has some interesting insights into the collapse of Lehman Brothers as viewed from British shores.

– Elsewhere, debate continues apace about the rights and wrongs of releasing the Lockerbie bomber. Suggesting that “cock-up offers as convincing an explanation as conspiracy for the handling of Mr Megrahi’s release”, Philip Stephens argues that the decision highlights the “price of realism” in foreign policy.

– Speaking of which, in the latest edition of FP Magazine none other than Paul Wolfowitz assesses the realist credentials of President Obama; providing at once a telling insight into the mindset of a man at the heart of foreign policy making during the Bush years.

– Mark Easton’s BBC blog, meanwhile, takes a look at how the British government is looking to influence public behaviour in light of the Chief Scientist’s warning of a “perfect storm” of energy, food and water scarcity by 2030.

– Finally, as President Obama holidays on Martha’s Vineyard, the White House announces what he’ll be reading on the beach. Slate offers its take here.

Moo hoo

I’ve just been having another look at FAO’s seminal 2006 report about the environmental impact of meat consumption, Livestock’s Long Shadow. I figured I knew most of the stats about meat’s massive contribution to scarcity issues – but nope, I found myself astonished once again by the report’s headline stats.  Livestock:

  • Uses 26% of the ice-free terrestrial surface for grazing, and 33% of the planet’s arable area for feedstock – in total, 70% of all agricultural land, and 30% of the land surface of the planet;
  • Accounts for 70% of previously forested land in the Amazon (and that’s just the pasture – feedcrops are another big chunk again);
  • Are responsible for 18% of greenhouse gas emissions in carbon dioxide equivalent – that’s larger than transport – and for 37% of methane emissions (23 times as potent as CO2 in its warming effect);
  • Uses 8% of global human water use, mostly in irrigation for feedcrops, and is probably the single largest sectoral source of water pollution;
  • Accounts for 20% of total terrestrial animal biomass – squeezing out space for other species and hence contributing massively to biodiversity loss, mainly through destroying habitats (30% of the land surface of the planet, remember)?

I love eating meat, but since I wrote The Feeding of the Nine Billion, I’ve been aiming to cut it out for 3 days a week.  Having re-read FAO’s report, I’m going to up that to four or five – as ways of reducing your carbon footprint and wider environmental impact go, this is a very low hassle,high impact option (especially if you have Sophie Grigson on your shelf).

Also, if you haven’t seen coverage of Tristram Stuart’s new book on food waste, then take a look

Here comes trouble

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:

What’s your fair share of meat?

Food historian Tristram Stuart has a piece in the Guardian this morning asking the question: what’s one person’s fair share of meat consumption? 

After all, meat (especially red meat) and dairy products have a disproportionate impact on climate change – the livestock industry is responsible for 18% of all greenhouse gas emissions – as well as on land use, grain consumption, water consumption and other issues besides.  So if by now we’re all used to the idea that we can quantify our carbon footprint and compare it to what our personal share would be if we had a safe global emissions budget that was shared out equitably between the world’s people, then what would the meat equivalent – the sustainable ‘Big Mac footprint’, if you like – work out at? 

As Tristram acknowledges, it’s not as straightforward as ‘meat bad, vegetables good’, given that

no two pieces of meat are the same. A hunk of beef raised on Scottish moorland has a very different ecological footprint from one created in an intensive feedlot using concentrated cereal feed, and a wild venison or rabbit casserole is arguably greener than a vegetable curry. Likewise, countries have very different animal husbandry methods. For example, in the US, for each calorie of meat or dairy food produced, farm animals consume on average more than 5 calories of feed. In India the rate is a less than 1.5 calories. In Kenya, where there isn’t the luxury of feeding grains to animals, livestock yield more calories than they consume because they are fattened on grass and agricultural by-products inedible to humans.

Nonetheless, encouraged by the declaration of a meat-free day a week in Ghent, Tristram’s got his calculator out and made a guesstimate of the kind of consumption changes we might be talking about.  Here’s the deal:

Global average consumption of meat and dairy products including milk was 152kg a person in 2003. Average EU and US consumption, by contrast, was over 400kg, while Uganda’s was 45kg. In order to reach the equitable fair share of global production, rich western countries would have to cut their consumption by 2.7 times – and this doesn’t include the fact that the butter will have to be spread even more thinly if the global population really does increase by another 2.3 billion by 2050.

However, still further reductions would be necessary because global meat production is already at unsustainable levels. The IPCC among other bodies, has called for an 80% reduction of greenhouse gas emissions by 2050. Since high levels of meat and dairy ­consumption are luxuries, it seems reasonable to expect livestock production to take its share of the hit. For rich ­western countries this would mean decreasing meat and dairy consumption to significantly less than one tenth of current levels, the sooner the better.