"The global battle for food, oil and water" 
(Copyright notice )
By Gideon Rachman
Published: January 28 2008
Soccer crowds in England like to abuse match referees by chanting: "You don't know what you're doing." If protesters had been able to get near the World Economic Forum in Davos last week, they could justifiably have aimed the same chant at the world leaders who assembled in the Alps.
These people are meant to be the "masters of the universe": presidents, prime ministers, bankers, billionaires. If anybody can make sense of world events, it should be them. But the air of confusion in Davos was both palpable and alarming.
The meeting took place against a background of crashing stock markets, panicky interest-rate cuts and a massive bank fraud. The global financial system is now so complicated that nobody really knows how deep its problems run. This central "known unknown" means that all the subsequent big questions are much harder to answer. Will America face a serious recession? It all depends. How bad will the knock-on effects be for the rest of world? Search me. How should politicians and regulators react? Difficult to say.
At Davos a year ago, the business and finance crowd were still full of the joys of globalisation, while it was the people dealing with international politics who were spreading alarm and despondency. This year the roles were reversed. While the financiers are frightened, the politicians and diplomats are going through a relatively calm period. There is less bloodshed in Iraq; the chances of war between the US and Iran have receded; Middle East peace talks have begun. The situation in Afghanistan looks bad, but not yet catastrophic.
Without a big short-term crisis to distract them, the international politics crowd were able to look at longer-term trends. They too are trying to understand the consequences of globalisation. But while the bankers grapple with the top end of the process the movement of billions of dollars around the world financial system the political analysts are increasingly preoccupied by the way globalisation is affecting people at the bottom of the pile.
The costs of food and energy are rising fast. The availability of water is also becoming an issue, from Australia to Africa. The struggle for these three basic commodities food, energy and water came up repeatedly in Davos.
Globalisation in particular the rise of China and India is driving a lot of these changes. The world oil price has risen by 80 per cent over the past 12 months and since 2001 China alone has accounted for about 40 per cent of the increase in oil demand. Global food prices have gone up by about 50 per cent this year. There are short-term reasons for this, such as a drought in Australia and pig disease in China. But the biggest long-term driver of increased prices is growing wealth in China and India.
Urbanisation and industrialisation are both increasing demand for water, at a time when climate change is disrupting supply. The rains in China are moving north and becoming more intense. The level of the Yangtse river is falling. Other important rivers around the world are suffering in the same way: the Murray in Australia, the Colorado in the US, the Tagus in Spain and Portugal. Businessmen can see the problem growing. Andrew Liveris, chairman of Dow Chemical told the Davos meeting that: "Water is ... the oil of the 21st century."
The food, energy and water problems all touch on each other. America's pursuit of alternatives to oil has led to massive investment in biofuels made from maize. That in turn has cut the amount of maize being used for food production and so contributed to rising food prices. The production of biofuels is also very water-intensive. Meanwhile, increased demand for agricultural land to grow more food is leading to the clearing of forest in Brazil which could worsen global warming leading to further stress on the world's water supplies.
The potential for political conflicts increases along with the rise in food, energy and water prices. Ban Ki-Moon, the United Nations secretary-general, told the Davos meeting that water shortages had helped to cause the conflict in Darfur.
Jami Miscik, head of global sovereign risk at Lehman Brothers, points to a series of less dramatic events, which highlight the political strains caused by rising food and energy prices: riots in Mexico last summer, after sharp increases in the price of maize flour; mass protests in Indonesia this month, provoked by the rising price of soyabeans; a deadly stampede in western China last November, caused by a rush for subsidised cooking oil; a food-price freeze in Russia, introduced just ahead of the parliamentary elections in December; gas and petrol rationing in Iran; blackouts in Argentina and South Africa.
This month Hugo Chαvez, the president of Venezuela, raised milk prices by 37 per cent and threatened military intervention and nationalisation if food producers did not sell more to the government.
All of these examples are confined within national boundaries. But competition for food, water and energy could also provoke conflict between countries. One session at Davos was devoted to the prospect of drilling for oil and gas in the Arctic. It heard that military activity in the area is increasing, as eight rival countries including Russia, the US, Canada and Norway gear up to assert their claims over the fossil fuels that lie beneath the melting Arctic ice.
The theme of this year's World Economic Forum was meant to be "collaborative innovation". It is difficult to think of anything less collaborative or innovative than a new era of resource wars.
Post and read comments at Gideon Rachman's blog
More columns at www.ft.com/gideonrachman
Copyright The Financial Times Limited 2008
We have reproduced these articles for scientific reference reasons only
America's optimism can benefit all
By Gideon Rachman
Published: February 5 2008
Here is a proposal for the next American president. The US should take the lead in setting up a massive, publicly funded research project to tackle climate change. The American government has, in the past, shown that it is capable of sponsoring pioneering science - from the Manhattan project that produced the atomic bomb to the space programme. Why not apply American energy, money and know-how to a new Manhattan project on global warming?
The secrets of the bomb and space programmes were kept closely guarded for security reasons. But climate change is a security issue for the whole world. So a US-led research project on technologies to tackle global warming could be a much more open and international affair. It would also have to be much more wide-ranging than the bomb or space programmes - sponsoring research on everything from alternative energy to carbon-capture and geo-engineering (such as efforts to create a stratospheric shield).
The main purpose of any such programme would be to combat the obvious threats posed by climate change. But it would also have the incidental benefit of blunting one of the main sources of global anti-Americanism - the idea that the US is too casual about climate change.
When, in the past, the Bush administration has argued that any solution to global warming must be primarily based on new technology and science, much of the rest of the world has treated the argument as a cynical evasion of the real issues.
But perhaps the American approach is simple good sense? After all, who is being more unrealistic - the Europeans who insist that global warming can only be fought by a massive international treaty that would implausibly demand China and India agree to slow their economies down dramatically; or those Americans who insist that the only workable solutions will be based on new technologies that allow the world economy to keep growing rapidly?
America's faith in the future and in technology continues to set the US apart from Europe. It is no accident that the information technology revolution that has transformed business and ordinary life all over the world was made in America. It happened not just because the US is home to the world's leading universities and a flourishing venture-capital industry. It is also to do with an attitude of mind.
The businessmen and scientists who built the IT revolution - men such as Bill Gates of Microsoft or Larry Page and Sergey Brin at Google - have a deep and profoundly optimistic belief in the power of technology to change the world for the better. They share an attitude that - in a different context - Senator Barack Obama has called "the audacity of hope".
America's leading technology companies are, of their own accord, already focusing their resources on problems such as climate change and disease eradication. They are setting an example for the US government - by demonstrating how American technological prowess can be harnessed for non-commercial purposes.
Microsoft and Google are, of course, bitter rivals in business. But the two companies also have a lot in common. Their founders are now so wealthy that they are able to spend billions on philanthropy - and to apply their faith in technology and scientific inquiry to entirely new fields.
The Gates Foundation, which now has an endowment of more than $37bn, is trying to crack some of the most difficult problems in medicine by developing vaccines for Aids and malaria. Google's charitable arm, Google.org, is a much more recent creation. Its self-proclaimed goal is to focus on the "world's biggest, most imminent and least well-resourced problems", with a particular focus on climate change. Google.org says it wants to develop renewable energy that is cheaper than coal "within years, not decades".
Such talk, coming from any other quarter, might provoke cynicism and derision. But the people behind Google and Microsoft should be taken seriously when they take on some of the most difficult technical challenges in the world. They bring money, brains, willpower and a proven record of success in producing and marketing transformational technologies.
The Gates Foundation and Google.org approach their new challenges in the spirit of Silicon Valley. At the Gates Foundation they say that they not only expect - but hope - that 19 out of 20 of their medical research projects will end up as failures. If too many of their projects succeed, it would be a sign that they are not trying hard enough. Playing safe is fine for America's National Institute of Health, which is a guardian of public money. But the Gates and Google people approach their problems like venture capitalists. They look for bright people with big ideas, and back them with big money. They expect that most of their projects will fail - but they also expect one or two really important breakthroughs.
This adventurous and multi-pronged approach is probably exactly what is needed to tackle the daunting range of scientific problems thrown up by climate change. People with a background in private industry or venture capital - rather than government - are most likely to have the right mentality for such a challenge. But global warming is a vital issue of public policy. And however many billions philanthropists can mobilise, the US government can always find more. Washington has shown in the past that it can set up world-changing scientific initiatives. The challenge of global warming is crying out for just such an approach.
gideon . rachman @ ft . com
|
previous
ecostory 
4/2008
next
back |
home | climate |
footprints |
population |
energy |
sustainability |
water
to 
halt 
| ecostory | feedback