31 Responses to Climate competitiveness 2: When the global Ponzi scheme collapses (circa 2030), the only jobs left will be green
In Why the United States REQUIRES a strong climate bill to remain competitive, Part 1, I reprised the thesis first documented by Harvard’s Michael Porter — strong, leading edge, pro-innovation regulations promote national competitiveness. As President Obama said yesterday:
We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for our lasting prosperity.
It is Obama’s final point — “lasting prosperity” — that is the focus of this post. Obama is hinting at a point I tried to make explicit with last week in my interview with NYT‘s Tom Friedman and subsequent post (see “Is the global economy a Ponzi scheme“):
“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm.
To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate.
In short, we have failed to designed a system capable of lasting prosperity. Quite the reverse.
Like all Ponzi schemes, the system must collapse. When it does, the only jobs left standing will be those that are “green” — which can be defined as those jobs that do not plunder nonrenewable energy resources and natural capital and/or do not to destroy a livable climate.
Strong climate legislation and a strong clean energy bill are not the only measures needed to avert the collapse, but they are an essential first start. Absent such action, the collapse is inevitable.
When will be collapse begin and what will it look like? I expect most opinion makers and the majority of the public to get desperate about reducing greenhouse gas emissions in the 2020s. But desperation is not collapse. I have tended to think that the inflection point is around 2030.
Now it just so happens that the UK government’s chief scientist, Professor John Beddington, laid out something very close to the collapse scenario in his speech yesterday to the government’s Sustainable Development UK conference in Westminster. He warned that by 2030, “A ‘perfect storm’ of food shortages, scarce water and insufficient energy resources threaten to unleash public unrest, cross-border conflicts and mass migration as people flee from the worst-affected regions,” as the UK’s Guardian put it.
… last year is the lowest level of reserves that we have had as a proportion of our consumption in years, since 1970 and actually since records were taken of this sort.That means that we’ve got somewhere like reserves of around 14% of our consumption, that implies, give or take, 38 or 39 days of food reserves if we don’t grow any more.
As you can see, it’s the lowest level that we’ve actually had. Is that a problem? Well the answer is yes it is going to be a problem. We saw the food spike last year; prices going up by something in the order of 300%, rice went up by 400%, we saw food riots, we saw major issues for the poorest in the world, in the sense that the organisations like the World Food Programme did not have sufficient money to buy food on the open market and actually use it to feed the poorest of the poor.
So this is a major problem. You can see the catastrophic decline in those reserves, over the last five years or so, indicates that we actually have a problem; we’re not growing enough food, we’re not able to put stuff into the reserves….
So, what are the drivers? I am going to go through them now very briefly.
First of all, population growth. World population grows by six million every month — greater than the size of the UK population every year. Between now and… I am going to focus on the year 2030 and the reason I am going to focus on 2030 is that I feel that some of the climate change discussions focusing on 2100 don’t actually grip…. I am going to look at 2030 because that’s when a whole series of events come together.
By 2030, looking at population terms, you are looking at the global population increasing from a little over six billion at the moment to about eight billion. What is actually happening to that extra population?
First of all, there is a second trend which is to do with population, which is urbanisation. Now as you can see (*refers to slideshow*) the crossover, for the first time in 2009, the urban population exceeded the rural population. And by 2030 again, looking at this graph, you can see that round about by 2030, the urban population is going to be substantially greater than the rural population: major issues for land use, major issues for providing that large urban population with food, with water and with energy. But the population will be distributed very differently to anything we’ve seen before. So, urbanisation is the second trend.
Now, the other trend which is actually good and which I spoke about last year and which is still there, is that, despite global recession, significant proportions of the developing world are actually moving out of what would be abject poverty and we are seeing a creation of what you might think of as middle class, particularly in India and China. Now that lifting from poverty is part of the Millennium Development Goals, we wish to see the world out of poverty, but as the world moves out of poverty, consumption patterns change.
I am going to deal with some of those in a little while, but in particular, we are going to see an increase in the demand for food. Looking at the demand for food, you are going to see major changes but particularly in the demand for livestock — meat and dairy. Now, this is not the West that is doing this. This is largely coming from the developing world as they move from very, very simple diets based on very simple agricultural products to more complex agricultural products, including livestock. [These are] perfectly reasonable and legitimate aims for countries moving out of abject poverty.
Quite clearly, there are issues to the individual, within the UK, about to what extent one eats high production diets, for example like large steaks. Someone gave me an indication that a steak meal has used as much carbon as actually driving a large Range Rover from London to Birmingham, so the next time you’re sitting down to your steak and chips, ponder that!
By 2030, the demand for food is going to be increased by about 50%. Can we do it? One of the questions. There is a major food security issue by 2030. We’ve got to somehow produce 50% more by that time.
The second issue I want to focus on is the availability of fresh water. If you’re looking at this slightly complicated graph, we are looking at the top left for the moment, which is showing that the fresh water available per head of the world population is around 25% of what it was in 1960. To give you some idea of this; there are enormous potential shortages in certain parts of the world… China has something like 23% of the world’s population and 11% of the world’s water.
Looking at the right-hand side of the graph, you can see that the massive use of water is in agriculture and particularly in developing world agriculture. Something of the order of 70% of that. One in three people are already facing water shortages and the total world demand for water is predicted to increase by 30% by 2030.
So, we’ve got food — expectation of demand increase of 50% by 2030, we’ve got water — expectation of demand increase of 30% by 2030. And in terms of what it looks like, we have real issues of global water security.
If you look at the graph, the red figures are where there is genuine water stress (this is a prediction of stress in 2025, a little before 2030), so we’re seeing it. Look at some of the places you would expect it, I have mentioned China and also parts of India, but look at parts of southern Europe where by 2025 we are looking at serious issues of water stress….
So, water is really enormously important. I am going to get onto the climate change interactions with it a little bit later but water is the one area that I feel is seriously threatening. It is so important because a shortage of water obviously interacts with a shortage of food, there are real potentials for driving significant international problems — what do you do if you have no water and you have no food? You migrate. So one can have a reasonable expectation that international migration will occur as these shortages come in.
Now, the third one I want to focus on is energy and, driven by the population increase that I talked about, the urbanisation I talked about and indeed the movement out of poverty, the expectation is that primary energy demand is going to increase. This graph shows that last year, for the first time, the demand of the rest of the world exceeded the demand of energy of the OECD. The shading of green is the rest of the non-OECD and the orange shading is China and India, so you can see the enormous effect that’s actually having and you can see the way in which energy demand is actually increasing and going to hit something of the order of a 50% increase, again by 2030.
Now, if that were not enough… those are three things that are coming together. What will the world be like when that happens? But we also have, of course, the issue of climate change. Now, this is a very familiar slide to you all but we are shooting for a target of two degrees centigrade, a perfectly sensible target. There is enormous uncertainty in the climate change models about that particular target. It is perfectly reasonable to say ‘shouldn’t we be shooting for one degrees centigrade or, oddly enough, it is perfectly reasonable to say ‘shouldn’t we be shooting for three degrees centigrade’, the only information we have is really enormously uncertain in terms of the climate change model.
Shooting for two seems a perfectly sensible and legitimate objective but there are enormous problems. You are talking about serious problems in tropical glaciers — the Chinese government has recognised this and has actually announced about 10 days ago that it is going to build 59 new reservoirs to take the glacial melt in the Xinjiang province. 59 reservoirs. It is actually contemplating putting many of them underground. This is a recognition that water, which has hitherto been stored in glaciers, is going to be very scarce. We have to think about water in a major way.
But the climate change agenda is there and we have to think about it, but this is looking to me like it is getting worse….
I was at a conference yesterday on Arctic ice at the Royal Society. There was a paper presented there by Wang and Overland which indicated that by 2030, they were predicting, the Arctic was likely to be ice-free in the summer. This would have the most enormous impact on the climate change system, big, big serious issues there.
The other area that really worries me in terms of climate change and the potential for positive feedbacks and also for interactions with food is ocean acidification….
As I say, it’s as acid today as it has been for 25 million years. When this occurred some 25 million years ago, this level of acidification in the ocean, you had major problems with it, problems of extinctions of large numbers of species in the ocean community. The areas which are going to be hit most severely by this are the coral reefs of the world and that is already starting to show. Coral reefs provide significant protein supplies to about a billion people. So it is not just that you can’t go snorkelling and see lots of pretty fish, it is that there are a billion people dependent on coral reefs for a very substantial portion of their high protein diet.
So, this is cheerful stuff, isn’t it? What I have said, which I guess is why I have been talking to the media a bit, is I have coined the point that we have got to deal with increased demand for energy, increased demand for food, increased demand for water, and we’ve got to do that while mitigating and adapting to climate change. And we have but 21 years to do it….
I will leave you with some key questions. Can nine billion people be fed? Can we cope with the demands in the future on water? Can we provide enough energy? Can we do it, all that, while mitigating and adapting to climate change? And can we do all that in 21 years time? That’s when these things are going to start hitting in a really big way. We need to act now. We need investment in science and technology, and all the other ways of treating very seriously these major problems. 2030 is not very far away.
Some of this can be avoid or minimized if we act now. Some of it can’t. But if we don’t act strongly now, then by 2030 we will be in the midst of this “perfect storm” of catastrophes — and everyone in the world will know we face much, much worse probably for hundreds and hundreds of years to come.
That is the inflection point, “Planetary Purgatory” — and you’ll want to make sure you and your children have a sustainable job by then. What that might be will be the subject of any later post.