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WORLD MAY BE FACING HIGHEST GRAIN PRICES IN HISTORY 19 March 2007 :: Lester R. Brown Investment in fuel ethanol distilleries has soared since the late-2005 oil price hikes, but data collection in this fast-changing sector has fallen behind. Because of inadequate data collection on the number of new plants under construction, the quantity of grain that will be needed for fuel ethanol distilleries has been vastly understated. Farmers, feeders, food processors, ethanol investors, and grain-importing countries are basing decisions on incomplete data. The U.S. Department of Agriculture (USDA) projects that distilleries will require only 60 million tons of corn from the 2008 harvest. But here at the Earth Policy Institute (EPI), we estimate that distilleries will need 139 million tons—more than twice as much. If the EPI estimate is at all close to the mark, the emerging competition between cars and people for grain will likely drive world grain prices to levels never seen before. The key questions are: How high will grain prices rise? When will the crunch come? And what will be the worldwide effect of rising food prices? [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
GLOBAL WARMING FORCING U.S. COASTAL POPULATION TO MOVE INLAND Those of us who track the effects of global warming had assumed that the first large flow of climate refugees would likely be in the South Pacific with the abandonment of Tuvalu or other low-lying islands. We Hurricane Katrina, which made landfall in late August 2005, forced a million people from New Orleans and the small towns on the Mississippi and Louisiana coasts to move inland either within state or to neighboring states, such as Texas and Arkansas. Although nearly all planned to return, many have not. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
WORLD’S WATER RESOURCES FACE MOUNTING PRESSURE Global freshwater use tripled during the second half of the twentieth century as population more than doubled and as technological advances let farmers and other water users pump groundwater from greater depths and harness river water with more and larger dams. As global demand soars, pressures on the world’s water resources are straining aquatic systems worldwide. Rivers are running dry, lakes are disappearing, and water tables are dropping. Nearly 70 percent of global water withdrawals from rivers, lakes, and aquifers are used for irrigation, while industry and households account for 20 and 10 percent, respectively. Pressure on water resources is particularly acute in arid regions that support agricultural production or large populations—regions where water use is high relative to water availability. The Middle East, Central Asia, North Africa, South Asia, China, Australia, the western United States, and Mexico are especially prone to water shortages. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
SUPERMARKETS & SERVICE STATIONS NOW COMPETING FOR GRAIN Cars, not people, will claim most of the increase in world grain consumption this year. The U.S. Department of Agriculture projects that world grain use will grow by 20 million tons in 2006. Of this, 14 million tons will be used to produce fuel for cars in the United States, leaving only 6 million tons to satisfy the world’s growing food needs. In agricultural terms, the world appetite for automotive fuel is insatiable. The grain required to fill a 25-gallon SUV gas tank with ethanol will feed one person for a year. The grain to fill the tank every two weeks over a year will feed 26 people. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
GLOBAL WIND POWER EXPANDS IN 2006 Global wind electricity-generating capacity increased by 24 percent in 2005 to 59,100 megawatts. This represents a twelvefold increase from a decade ago, when world wind-generating capacity stood at less than 5,000 megawatts. Wind is the world’s fastest-growing energy source with an average annual growth rate of 29 percent over the last ten years. In contrast, over the same time period, coal use has grown by 2.5 percent per year, nuclear power by 1.8 percent, natural gas by 2.5 percent, and oil by 1.7 percent. Europe continues to lead the world in total installed capacity with over 40,500 megawatts, or two-thirds of the global total. These wind installations supply nearly 3 percent of Europe’s electricity and produce enough power to meet the needs of over 40 million people. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
WORLD GRAIN STOCKS FALL TO 57 DAYS OF CONSUMPTION This year’s world grain harvest is projected to fall short of consumption by 61 million tons, marking the sixth time in the last seven years that production has failed to satisfy demand. As a result of these shortfalls, world carryover stocks at the end of this crop year are projected to drop to 57 days of consumption, the shortest buffer since the 56-day-low in 1972 that triggered a doubling of grain prices. Reproduced here by Permission of Earth Policy Institute
SHIFTING PROTEIN SOURCES The composition of world meat production has changed dramatically over the last half-century or so. From 1950 until 1978, beef and pork vied for the lead. Then the world meat consumption pattern began to change as economic reforms adopted in China in 1978 led to a dramatic climb in pork production, pushing it far ahead of beef worldwide. In an effort to minimize waste, village families in China have a long-standing tradition of keeping a pig, which is fed all the kitchen and table waste. When the pig matures, it is butchered and eaten and replaced with another small, recently weaned, pig. Even today, four fifths of China’s pork production takes place at the family level. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
THE WORLD AFTER OIL PEAKS Peak oil is described as the point where oil production stops rising and begins its inevitable long-term decline. In the face of fast-growing demand, this means rising oil prices. But even if oil production growth simply slows or plateaus, the resulting tightening in supplies will still drive the price of oil upward, albeit less rapidly. Few countries are planning a reduction in their use of oil. Even though peak oil may be imminent, most countries are counting on much higher oil consumption in the decades ahead, building automobile assembly plants, roads, highways, parking lots, and suburban housing developments as though cheap oil will last forever. New airliners are being delivered with the expectation that air travel and freight will expand indefinitely. Yet in a world of declining oil production, no country can use more oil except at the expense of others. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
LET’S RAISE GAS TAXES & LOWER INCOME TAXES The amount of oil pumped has exceeded new discoveries since 1980. And the gap is widening. In 2004, for example, the world pumped nearly 31 billion barrels of oil while discovering fewer than 8 billion barrels of new oil. Instead of encouraging gasoline use with tax rebates or gas tax holidays, we need a way to reduce gasoline use, one that is practical and politically acceptable. We need a higher gas tax, but the only way to get a gas tax rise large enough to wean us from imported oil is to offset the rise with a reduction in the tax on income. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
THE COMING DECLINE OF OIL When the price of oil climbed above $50 a barrel in late 2004, public attention began to focus on the adequacy of world oil supplies—and specifically on when production would peak and begin to decline. Analysts are far from a consensus on this issue, but several prominent ones now believe that the oil peak is imminent. Oil has shaped our twenty-first century civilization, affecting every facet of the economy from the mechanization of agriculture to jet air travel. When production turns downward, it will be a seismic economic event, creating a world unlike any we have known during our lifetimes. Indeed, when historians write about this period in history, they may well distinguish between before peak oil (BPO) and after peak oil (APO). [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
U.S. MAYORS RESPOND TO WASHINGTON LEADERSHIP VACUUM ON CLIMATE CHANGE Recognizing that global warming may fast be approaching the point of no return and that the world cannot wait for the U.S. government to act, hundreds of U.S. city mayors have pledged to cut emissions of greenhouse gases. By signing the U.S. Mayors Climate Protection Agreement, these mayors—representing some 44 million Americans—have committed their cities to meet or beat the U.S. emissions reduction target in the Kyoto Protocol, despite the federal government’s refusal to ratify that treaty. This grassroots political revolution, spearheaded by Greg Nickels, Mayor of Seattle, Washington, and endorsed by the U.S. Conference of Mayors, responds to the mounting concerns of the American people. It calls for reducing greenhouse gas emissions to 7 percent below 1990 levels by 2012. As Burlington, Vermont, Mayor Peter Clavelle noted: “We can't wait for this vacuum of leadership to fill.” [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
WIND ENERGY DEMAND BOOMING When Austin Energy, the publicly owned utility in Austin, Texas, launched its GreenChoice program in 2000, customers opting for green electricity paid a premium. During the fall of 2005, climbing natural gas prices pulled conventional electricity costs above those of wind-generated electricity, the source of most green power. This crossing of the cost lines in Austin and several other communities is a milestone in the U.S. shift to a renewable energy economy. Austin Energy buys wind-generated electricity under 10-year, fixed-price contracts and passes this stable price on to its GreenChoice subscribers. This fixed-price energy product is quite attractive to Austin’s 388 corporate GreenChoice customers, including Advanced Micro Devices, Dell, IBM, Samsung, and 3M. Advanced Micro Devices expects to save $4 million over the next decade through this arrangement. School districts are also signing up. Round Rock School District, for example, projects 10-year savings to local taxpayers at $2 million. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
BOTTLED WATER: POURING RESOURCES DOWN THE DRAIN The global consumption of bottled water reached 154 billion liters (41 billion gallons) in 2004, up 57 percent from the 98 billion liters consumed five years earlier. Even in areas where tap water is safe to drink, demand for bottled water is increasing—producing unnecessary garbage and consuming vast quantities of energy. Although in the industrial world bottled water is often no healthier than tap water, it can cost up to 10,000 times more. At as much as $2.50 per liter ($10 per gallon), bottled water costs more than gasoline. The United States is the world’s leading consumer of bottled water, with Americans drinking 26 billion liters in 2004, or approximately one 8-ounce glass per person every day. Mexico has the second highest consumption, at 18 billion liters. China and Brazil follow, at close to 12 billion liters each. Ranking fifth and sixth in consumption are Italy and Germany, using just over 10 billion liters of bottled water each. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
POPULATION, LAND, AND CONFLICT As land and water become scarce and as competition for these vital resources intensifies, we can expect mounting social tensions within societies, particularly between those who are poor and dispossessed and those who are wealthy, as well as among ethnic and religious groups. Population growth brings with it a steady shrinkage of life-supporting resources per person. That decline, which is threatening to drop the living standards of more and more people below survival level, could lead to unmanageable social tensions that will translate into broad-based conflicts. Worldwide, the area in grain expanded from 590 million hectares (1,457 million acres) in 1950 to its historical peak of 730 million hectares in 1981. By 2004, it had fallen to 670 million hectares. Even as the world’s population continues to grow, the area available for producing grain is shrinking. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
DEAD ZONES INCREASING IN WORLD'S COASTAL WATERS As summer comes to the Gulf of Mexico, it brings with it each year a giant “dead zone” devoid of fish and other aquatic life. Expanding over the past several decades, this area now can span up to 21,000 square kilometers, which is larger than the state of New Jersey. A similar situation is found on a smaller scale in the Chesapeake Bay, where since the 1970s a large lifeless zone has become a yearly phenomenon, sometimes shrouding 40 percent of the bay. Worldwide, there are some 146 dead zones—areas of water that are too low in dissolved oxygen to sustain life. Since the 1960s, the number of dead zones has doubled each decade. Many are seasonal, but some of the low-oxygen areas persist year-round. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
WORLD FOOD SECURITY DETERIORATING Closing the gap in the world grain harvest this year following four consecutive grain harvest shortfalls, each larger than the one before, will not be easy. The grain shortfall of 105 million tons in 2003 is easily the largest on record, amounting to 5 percent of annual world consumption of 1,930 million tons. The four harvest shortfalls have dropped world carryover stocks of grain to the lowest level in 30 years, amounting to only 59 days of consumption. Wheat and corn prices are at 7-year highs. Rice prices are at 5-year highs. (See data.) Can the world's farmers close the gap this year? In addition to the usual uncertainties farmers face, they must now contend with two newer trends—falling water tables and rising temperatures. If there is another large shortfall, grain prices will continue the rise of recent months, driving up food prices worldwide. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
SAUDIS HAVE U.S. OVER A BARREL In 1970, a bushel of wheat could be traded for a barrel of oil in the world market. It now takes nine bushels of wheat to buy a barrel of oil. The two countries most affected by the dramatically shifting terms of trade between grain and oil are the United States and Saudi Arabia. The United States, the world's largest importer of oil and its largest exporter of grain, is paying for this shift in the wheat-oil exchange rate with higher gasoline prices. The nine-fold shift is also driving the largest U.S. trade deficit in history, which in turn is raising external debt to a record level, weakening the U.S. economy. In contrast, Saudi Arabia, the world's leading oil exporter and a high-ranking grain importer, is benefiting handsomely. During the early 1970s before the oil price hikes by OPEC, the United States largely could pay its oil import bill with grain exports. But in 2003, grain exports covered only 11 percent of the staggering U.S. oil import bill of $99 billion. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
THE SIXTH GREAT EXTINCTION: A Status Report Almost 440 million years ago, some 85 percent of marine animal species were wiped out in the earth's first known mass extinction. Roughly 367 million years ago, once again many species of fish and 70 percent of marine invertebrates perished in a major extinction event. Then about 245 million years ago, up to 95 percent of all animals—nearly the entire animal kingdom—were lost in what is thought to be the worst extinction in history. ... After each extinction, it took upwards of 10 million years for biological richness to recover. Yet once a species is gone, it is gone forever. The consensus among biologists is that we now are moving toward another mass extinction that could rival the past big five. This potential sixth great extinction is unique in that it is caused largely by the activities of a single species. It is the first mass extinction that humans will witness firsthand—and not just as innocent bystanders. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
WIND POWER SET TO BECOME WORLD'S LEADING ENERGY SOURCE In 1991, a national wind resource inventory taken by the U.S. Department of Energy startled the world when it reported that the three most wind-rich Advances in wind turbine design since 1991 allow turbines to operate at lower wind speeds, to harness more of the wind's energy, and to harvest it Reproduced here by Permission of Earth Policy Institute
WORLD CREATING FOOD BUBBLE ECONOMY BASED ON UNSUSTAINABLE USE OF WATER On March 16, 2003, some 10,000 participants will meet in Japan for the third World Water Forum to discuss the world water prospect. Although they will be officially focusing on water scarcity, they will indirectly be focusing on food scarcity because 70 percent of the water we divert from rivers or pump from underground is used for irrigation. As world water demand has tripled over the last half-century, it has exceeded the sustainable yield of aquifers in scores of countries, leading to falling water tables. In effect, governments are satisfying the growing demand for food by overpumping groundwater, a measure that virtually assures a drop in food production when the aquifer is depleted. Knowingly or not, governments are creating a "food bubble" economy. As water use climbs, the world is incurring a vast water deficit... [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
AIR POLLUTION FATALITIES NOW EXCEED TRAFFIC FATALITIES BY THREE TO ONE The World Health Organization reports that 3 million people now die each year from the effects of air pollution. This is three times the 1 million who die each year in automobile accidents. A study published in The Lancet in 2000 concluded that air pollution in France, Austria, and Switzerland is responsible for more than 40,000 deaths annually in those three countries. About half of these deaths can be traced to air pollution from vehicle emissions. In the United States, traffic fatalities total just over 40,000 per year, while air pollution claims 70,000 lives annually. U.S. air pollution deaths are equal to deaths from breast cancer and prostate cancer combined. This scourge of cities in industrial and developing countries alike threatens the health of billions of people. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
ILLEGAL LOGGING THREATENS ECOLOGICAL & ECONOMIC STABILITY Extensive floods in Indonesia during early 2002 have killed hundreds of people, destroyed thousands of homes, damaged thousands of hectares of rice paddy fields, and inundated Indonesian insurance companies with flood-related claims. Rampant deforestation, much of it from illegal logging, has destroyed forests that stabilize soils and regulate river flow, causing record floods and landslides. In just 50 years, Indonesia's total forest cover fell from 162 million hectares to 98 million. Roads and development fragment over half of the remaining forests. More than 16 million people depend on fresh water from Indonesia's 15 largest watersheds, which between 1985 and 1997 lost at least 20 percent of their forest cover. Loggers have cleared almost all the biologically diverse lowland tropical forests off Sulawesi, and if current trends continue, such forests will be gone from Sumatra in 2005 and Kalimantan by 2010. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
OUR CLOSEST RELATIVES ARE DISAPPEARING After more than a century of no known primate extinctions, scientists recently confirmed the disappearance of a subspecies of a West African monkey. The loss of this monkey, known as Miss Waldron's red colobus, may be a harbinger of future losses of our closest evolutionary relatives. Out of some 240 known primate species, 19 are critically endangered, up from 13 in 1996. This classification refers to species that have suffered extreme and rapid reductions in population or habitat. Their remaining numbers range from less than a few hundred to, at most, a few thousand individuals. If their populations continue to shrink at recent rates, some species will not survive this decade. This group, according to the World Conservation Union's 2000 IUCN Red List of Threatened Species, includes 8 monkeys from Brazil's Atlantic rainforest, where 97 percent of the forest has been lost, 2 apes and a monkey from Indonesia, 3 monkeys from Viet Nam, 1 each from Kenya and Peru, and 3 lemur species from Madagascar. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
WORLD'S RANGELANDS DETERIORATING UNDER MOUNTING PRESSURE In late January, a dust storm originating in northwestern China engulfed Lhasa, the capital of Tibet, closing the airport for three days and disrupting tourism. Such dust storms are no longer uncommon. Dust storms originating in Central Asia, coupled with those originating in Saharan Africa that now frequently reach the Caribbean remind us that desertification of the world's rangelands is ongoing. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
DUST BOWL THREATENING CHINA'S FUTURE On April 18, scientists at the National Oceanic and Atmospheric Administration (NOAA) laboratory in Boulder, Colorado, reported that a huge dust storm from northern China had reached the United States “blanketing areas from Canada to Arizona with a layer of dust.” They reported that along the foothills of the Rockies the mountains were obscured by the dust from China. This dust storm did not come as a surprise. On March 10, 2001, The People’s Daily reported that the season’s first dust storm —one of the earliest on record— had hit Beijing. These dust storms, coupled with those of last year, were among the worst in memory, signaling a widespread deterioration of the rangeland and cropland in the vast northwest. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy Institute
POPULATION GROWTH SENTENCING MILLIONS TO HYDROLOGICAL POVERTY At a time when drought in the United States, Ethiopia, and Afghanistan is in the news, it is easy to forget that far more serious water shortages are emerging as the demand for water in many countries simply outruns the supply. Water tables are now falling on every continent. Literally scores of countries are facing water shortages as water tables fall and wells go dry. We live in a water-challenged world, one that is becoming more so each year as 80 million additional people stake their claims to the Earth’s water resources. Unfortunately, nearly all the projected 3 billion people to be added over the next half century will be born in countries that are already experiencing water shortages. [Full Story :: Top ^] Reproduced here by Permission of Earth Policy InstituteCopyright © 2000 Earth Policy Institute |
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OUT-GROWING THE EARTH: 
ECO-ECONOMY: Building an Economy for the Earth 
Original, Graphic Content © 2000-08 Sentido