2 Weathering a Perfect Storm
‘There are dramatic problems out there, particularly with water and food, but energy also, and they are all intimately connected. You can’t think about dealing with one without considering the others. We must deal with all of these together.’
John Beddington, chief science advisor to the UK government
In 2009, the UK Office for Science published a paper called Food, Energy, Water and the Climate: A Perfect Storm of Global Events? Written by John Beddington, the UK government’s chief science advisor, A Perfect Storm is a harrowing document. At least it is if you take it at face value, which is exactly what the media did. In summary, the report highlights the fact that the world’s projected population growth by 2030 will lead, together with the incumbent economic and environmental factors, to a 30 per cent increase in demand for water and a 50 per cent increase in demand for food and energy. The press went to great lengths to ensure that the scale of these challenges was not understated. Good news sells few papers and in that regard A Perfect Storm made for excellent copy. Yet there’s another way of looking at the information contained in the report. Beddington’s erudite analysis of the challenges is certainly not bedtime reading for those of a nervous disposition, but the report’s real success, and one rarely noted, is that it highlights everything that we need to do: as the starting point for a strategy to address these challenges, it could not be better.
A Perfect Storm describes not the end of the world, but a starting point for its salvation. It’s definitely not the best place to start from, but the most important thing is that we do know where to start. The implications of population growth will not prove to be as easy to ignore for much longer. New inhabitants are being added at the rate of 6 million each month (the equivalent to a city the size of Rio de Janeiro) and they will not be spread evenly. In the developed world outside the USA low birth rates mean that indigenous populations are in decline in many countries. By 2020, there will be more people over the age of 60 than under 20 in many European states. Conceived in the 1940s, the UK’s welfare state, which served as a model for many other countries, was designed to cater for citizens who worked for 50 years, paying national insurance while they did, then spent a few brief years in retirement drawing it out before cost-effectively and expediently passing away.
Without reform, this shift in demographic is going to put national health and welfare systems under enormous pressure. Today most people can reasonably expect to live for another 20 or even 30 years after retiring. This means that over the next 30 years, there will be more and more people leaving economic productivity and entering retirement, but conversely fewer and fewer people of working age to look after them. There will also be fewer people to pay for national insurance to meet the increased demand for healthcare and welfare.
The key points here are that we already know this – it’s not some nasty surprise waiting to pounce – and we have 30 years to sort it out. To do that we need to plan for this future today and completely rethink the way that welfare is funded. Yes, there will be more responsibility on individuals to plan and pay for their retirement and healthcare, and services we take for granted today will become much more expensive, but we have the luxury of being able to decide now what we want to deal with this future problem and how we want to pay for it. We don’t have to fire-fight or come up with policies on the hoof.
While Europe deals with its burgeoning pensioners, many parts of the developing world are dealing with the opposite problem: explosive population growth that is outpacing economic growth. In Africa the continent’s population is set to double from 1 billion to 2 billion by 2030, by which point half of its inhabitants will be under the age of 20. Similar rapid expansions are being experienced across much of the developing world, provoking other transformational changes, most notably urbanisation, as people migrate to cities from rural areas in search of work. Half the world is already living in cities, but this will increase to 60 per cent by 2030. There will be at least 29 ‘mega cities’ with more than 10 million inhabitants by 2025. That is ten more than there are today. All of these additional people will require food, water, shelter, energy and a host of other services. The inevitable competition for land that this will create is foreshadowed today by increasing purchases of real estate in developing nations by some countries with hot and dry climates and limited water supplies – notably Egypt, Saudi Arabia and China – and also by multinational corporations.
Our challenge to ensure food security for a global population of 9 billion in a manner that is equitable, healthy and sustainable is simple to understand: we must grow much more food on the same land, using less water, fertiliser and pesticides than ever before. Achieving this in the face of rapidly dwindling natural resources will be no walk in the park, but it is possible. Science and technology will make the most significant contribution, providing practical solutions across the board from engineering to biotechnology, but success will also demand behavioural changes of us all. In future, we will need to manage our lives and societies much more efficiently than we do at the moment.

2008 saw the sudden end of a 20-year economic Golden Age for almost all of the world’s leading economies. It’s easy to be critical with hindsight, but at the time most governments, financiers and economists were of the view that perpetual and sustainable affluence was a realistic objective – ‘the end of boom and bust’ no less. The Credit Crunch brutally dispelled our beguilement by the arcane chicanery of banks and other financial institutions, bringing the blunt realities of commodities markets into sharp focus. Wheat and maize prices rocketed before finally settling down at three times their 2005 levels, thereby marking the end of two decades of low-cost food for consumers. Although prices are less volatile today, cereal stocks remain stubbornly at a 40-year low, which, together with the increasing demand for food, energy and water from the emerging economies, will continue to put pressure on food prices for the foreseeable future. Increasing the yield of cereal crops using existing, proven technologies is both practical and realisable in the short term. This should be the goal for every one of the world’s agricultural ministries.
Not every nation was plunged into recession in 2008. Those states operating more traditional economic models – based on production, manufacturing and government intervention, rather than leveraged borrowing, notional property values and unfettered money markets – continued to perform well, particularly those with large populations and plentiful natural resources. Brazil, Russia, India and China are known collectively as the BRIC countries. These states have all embraced global capitalism and adapted their political systems to facilitate rapid growth. It is expected that they will become the dominant suppliers of manufactured goods and services over the coming decades, with Russia and Brazil also becoming the dominant suppliers of raw materials. The BRICs’ burgeoning prosperity is a further, powerful driving force behind the demand for energy. Since 1900 real income has grown by a factor of 25, and primary energy consumption by a factor of 22.5. Natural resources are in decline and competition for what’s left is going to increase as 1 billion super-consumers of the OECD are joined by a further three billion from the BRICs.
Economic success, within the BRICs at least, will lead directly to an increase in prosperity, lifting tens if not hundreds of millions of people out of poverty. But this positive outcome will only add to our list of challenges. When wages rise in developing and middle-income countries, we find that people consume more meat and dairy products, which in turn causes rapid growth in demand for agricultural commodities to feed the extra livestock. The continued pressure on cereal stocks is due in part to the rising consumption of meat and dairy, especially in China and Brazil. There are no signs that cereal prices will flatten out any time soon, indeed it’s reasonable to expect that they will continue to increase, as incomes grow in India and sub-Saharan Africa; places where per capita meat consumption today is low. The UN Food and Agriculture Organisation (FAO) projects that farms will be required to produce around 40 per cent more food to meet the demand in 2030 than they did in 2008. Yet even this startling estimate – the equivalent of an annual increase in productivity of 1.5 per cent – is not the whole story. Meat demand will double by 2050 and all those additional animals will also need feeding. Each of these production targets has further implications for supplies of land, water and most importantly of all, for supplies of energy.
This pressure on agriculture to produce more with less will make the biggest contribution to a 45 per cent increase in demand for energy between 2006 and 2030. Notwithstanding the real situation regarding how much oil is left in the ground, mitigating climate change means that an alternative to fossil fuel will be required to make up the (significant) shortfall. Biofuels can be used for transportation, while biomass can be burned to produce heat or electricity. This will, however, provide even greater competition for land, water, food and energy. Again, the majority of this demand for energy is going to come from within the BRICs and notably from India and China, which between them contain approximately half of the world’s people.
Like food, water demand is a function of population, incomes, diets and the requirements of irrigated agriculture, but also of industrialisation. Heavy industry – like the kind powering growth in the BRICs – requires lots of water. Agriculture will find itself increasingly competing for water and land not just with commerce, but with the cities it’s being asked to feed. Mid-range estimates suggest that the demand for fresh water by agriculture alone will be 30 per cent higher in 2030, while the total global demand could be as much as 60 per cent higher by 2025. Shortly, we will find water being treated like any other commodity and subjected to the same market forces. The notion of a free natural resource will be consigned to the history books and bottled water will become a fact of life rather than a fad or affectation. Today 1.2 billion people are already living in areas affected by water scarcity; this figure will increase significantly in future. There are already early signs of things to come. Water conflict occurs between two or more neighbouring countries that share a trans-boundary water source, such as a river, artesian basin or lake. In the case of Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan, the dispute is over access to the Aral Sea. With no satisfactory diplomatic solution on the horizon, relations between the five nations are increasingly hostile.
Our entire industrial and agricultural system relies upon a constant supply of oil. We use oil and liquid fuels at a rate of 89 million barrels per day (mb/d); demand in 2030 will be at least 25 per cent higher. There isn’t an infinite supply of oil, and even if we are finding more creative ways to extract what’s left, one day we will run out. It’s impossible to know for sure how much oil remains, but just because we may have underestimated the quantity in the past, that doesn’t mean we’re underestimating how much is there now. Unfortunately we won’t know for certain until we reach a point where we can’t extract enough to satisfy demand. ‘Peak oil’ is the term used to describe this point: when the maximum rate of global petroleum extraction is reached, after which the rate of production enters into terminal decline. The Day of Peak Oil is even more difficult to estimate than the Day of Seven Billion – we can ‘see’ the people, but the world’s reserves of oil remain hidden from us. The idea of peak oil is based on observations of production from existing oil wells and fields combined with estimates about the likelihood and size of undiscovered reserves. We may have already hit peak oil. The International Energy Agency believes that 2006 was the peak year of production for conventional crude oil, and even the most optimistic estimate forecasts that production will decline after 2020.
An uneasy balance also characterises the oil market. Most or our oil comes from the more politically turbulent areas of the world, while demand fluctuates dramatically. During recessions, industry and consumers use less oil so the market softens; likewise the price increases during periods of growth when demand is greater. Other factors such as the weather can also dramatically affect the price. January 2012 was a typical month, with tensions surrounding Iran counteracting a weaker economic outlook. In Europe the late onset of winter weather pushed prices for Brent Crude to six-month highs in early February, trading at $117.50/barrel. In contrast, slower than expected demand from industry led to rising stocks at some storage depots, pressuring the price of West Texas Indeterminate – a lighter oil variant than Brent – down to $99.50/barrel.
The key point is not just that the supplies of oil are decreasing, but that the global demand for whatever is left is increasing. Global oil demand rose to 89.9 mb/d in 2012, a rise of 0.8 mb/d (or 0.9 per cent) on the previous year. Whichever projection about how much oil is left turns out to be true, it’s unlikely that we will ever be able to increase production much beyond 90 million barrels a day; a lot less than we are predicted to need. Oil, regardless of how much remains, is going to become a lot more expensive.
During 2012, the controversial process known as fracking, which liberates natural gas trapped within shale deposits, picked up media coverage and is seen by many as a greener alternative to petroleum and coal. The key point is that it might well be ‘greener’, but it’s not ‘green’. Yes, natural gas is the least carbon-intensive of the fossil fuels, but it’s a very long way from being carbon-free. Even switching exclusively to natural gas, abandoning oil and coal altogether would do nothing to stop global warming and the effects of climate change, which would continue unabated, with devastating consequences for us all.
Clearly we need an alternative to oil to power our homes and industries and to fuel our trains, planes and automobiles, but our reliance extends much further than many of us think. The plastics we take for granted are all currently derived from petroleum, and it’s at the heart of modern agriculture. That means that our alternatives to oil will have to do more than provide power and transportation; oil is used to create artificial fertiliser, so we need to dramatically increase the yield from land and produce crops that don’t need it.
Finally, all these challenges must be dealt with against the backdrop of climate change. Extreme weather, rising global temperatures and rising sea levels will further impact food production and water supplies across the world. The areas likely to be hardest hit are those most important for food production: the mega-deltas of the Nile, Amazon, Ganges, Yangtze and other major rivers. The oceans, already over-exploited, will become less diverse as whole ecosystems vanish completely.
Can we weather the perfect storm? The answer is unequivocally yes, but in doing so we will create a world very different from the one we are living in today. Different – we can’t paddle out of this creek in the same canoe we came in on – but not necessarily worse. Things should be much better for most people, and the lives we must lead will certainly be less wasteful. The one thing we should not fear is change. In helping to achieving this, the most plentiful resource we have is also the one that is most under-exploited. Our sun can give us all the energy we will ever need. As we noted above, if we harness all the energy in just one hour’s worth of sunlight that reaches the Earth, we will be able to meet the planet’s food and energy needs for an entire year. Thomas Edison, inventor of the electric light bulb, pioneer of alternating current and the power station, certainly recognised the opportunity: ‘I’d put my money on the sun and solar energy’, he said. ‘What a source of power! I hope we don’t have to wait till oil and coal run out before we tackle that.’
It’s not beyond our ability to generate all the energy, food and water we need in a way that is affordable, sustainable and widely available. We know already how to increase crop yields five-fold and how to intervene so that waste can be practically eliminated. Nuclear and solar power can provide us with electricity, while biodiesel, harvested from vast third-generation photo-bioreactors connected to factories or on algal-diesel farms located in the world’s barren deserts, can be used to fuel comprehensive public transport systems and private vehicles. But in order to understand fully how we are going to live in – and enjoy – the future, we need to understand how we got here in the first place.