Rescuing a Planet Under Stress
Page 4: The Challenge to Change

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The Emerging Politics of Scarcity

The first big test of the international community’s capacity to manage scarcity may come with oil or it could come with grain. If the latter is the case, this could occur when China—whose grain harvest fell by 34 million tons, or 9 percent, between 1998 and 2005—turns to the world market for massive imports of 30 million, 50 million, or possibly even 100 million tons of grain per year.

Demand on this scale could quickly overwhelm world grain markets. When this happens, China will have to look to the United States, which controls the world’s grain exports of over 40 percent of some 200 million tons.

This will pose a fascinating geopolitical situation. More than 1.3 billion Chinese consumers, who had an estimated $160-billion trade surplus with the United States in 2004—enough to buy the entire U.S. grain harvest twice—will be competing with Americans for U.S. grain, driving up U.S. food prices.

In such a situation 30 years ago, the United States simply restricted exports. But China is now banker to the United States, underwriting much of the massive U.S. fiscal deficit with monthly purchases of U.S. Treasury bonds.

Within the next few years, the United States may be loading one or two ships a day with grain for China. This long line of ships stretching across the Pacific, like an umbilical cord providing nourishment, will intimately link the two economies. Managing this flow of grain so as to simultaneously satisfy the food needs of consumers in both countries, at a time when ethanol fuel distilleries are taking a growing share of the U.S. grain harvest, may become one of the leading foreign policy challenges of this new century.

The way the world accommodates the vast projected needs of China, India, and other developing countries for grain, oil, and other resources will help determine how the world addresses the stresses associated with outgrowing the earth. How low-income, importing countries fare in this competition for grain will also tell us something about future political stability. And, finally, the U.S. response to China’s growing demands for grain even as they drive up food prices for U.S. consumers will tell us much about the capacity of countries to manage the emerging politics of scarcity.

The most imminent risk is that China’s entry into the world market, combined with the growing diversion of farm commodities to biofuels, will drive grain prices so high that many low-income developing countries will not be able to import enough grain. This in turn could lead to escalating food prices and political instability on a scale that will disrupt global economic progress.

Earlier civilizations that moved onto an economic path that was environmentally unsustainable did so largely in isolation. But in today’s increasingly integrated, interdependent world economy, if we are facing civilizational decline, we are facing it together. The fates of all peoples are intertwined. This interdependence can be managed to our mutual benefit only if we recognize that the term “in the national interest” is in many ways obsolete.

Getting the Price Right

The question facing governments is whether they can respond quickly enough to prevent threats from becoming catastrophes. The world has precious little experience in responding to aquifer depletion, rising temperatures, expanding deserts, melting polar ice caps, and a shrinking oil supply. These new trends will fully challenge the capacity of our political institutions and leadership. In times of crisis, societies sometimes have a Nero as a leader and sometimes a Churchill.

The central challenge, the key to building the new economy, is getting the market to tell the ecological truth. The dysfunctional global economy of today has been shaped by distorted market prices that do not incorporate environmental costs. Many of our environmental travails are the result of severe market distortions. One of these distortions became abundantly clear in the summer of 1998 when China’s Yangtze River valley, home to 400 million people, was wracked by some of the worst flooding in history. The resulting damages of $30 billion exceeded the value of the country’s annual rice harvest.

After several weeks of flooding, the government in Beijing announced in mid-August a ban on tree cutting in the Yangtze River basin. It justified the ban by noting that trees standing are worth three times as much as trees cut. The flood control services provided by forests were three times as valuable as the lumber in the trees. In effect, the market price was off by a factor of three! With this analysis, no one could economically justify cutting trees in the basin.

A similar situation exists with gasoline. In the United States, the gasoline pump price was over $2 per gallon in mid-2005. But this reflects only the cost of pumping the oil, refining it into gasoline, and delivering the gas to service stations. It does not include the costs of tax subsidies to the oil industry, such as the oil depletion allowance; the subsidies for the extraction, production, and use of petroleum; the burgeoning military costs of protecting access to oil supplies; the health care costs for treating respiratory illnesses ranging from asthma to emphysema; and, most important, the costs of climate change.

If these costs, which in 1998 the International Center for Technology Assessment calculated at roughly $9 per gallon of gasoline burned in the United States, were added to the $2 cost of the gasoline itself, motorists would pay about $11 a gallon for gas at the pump. Filling a 20-gallon tank would cost $220. In reality, burning gasoline is very costly, but the market tells us it is cheap, leading to gross distortions in the structure of the economy. The challenge facing governments is to incorporate such costs into market prices by systematically calculating them and incorporating them as a tax on the product to make sure its price reflects the full costs to society.

If we have learned anything over the last few years, it is that accounting systems that do not tell the truth can be costly. Faulty corporate accounting systems that leave costs off the books have driven some of the world’s largest corporations into bankruptcy, costing millions of people their lifetime savings, retirement incomes, and jobs. Distorted world market prices that do not incorporate major costs in the production of various products and the provision of services could be even costlier. They could lead to global bankruptcy and economic decline.

Plan B—A Plan of Hope

Even given the extraordinarily challenging situation we face, there is much to be upbeat about. First, virtually all the destructive environmental trends are of our own making. All the problems we face can be dealt with using existing technologies. And almost everything we need to do to move the world economy onto an environmentally sustainable path has been done in one or more countries.

We see the components of Plan B—the alternative to business as usual—in new technologies already on the market. On the energy front, for example, an advanced-design wind turbine can produce as much energy as an oil well. Japanese engineers have designed a vacuum-sealed refrigerator that uses only one eighth as much electricity as those marketed a decade ago. Gaselectric hybrid automobiles, getting 55 miles per gallon, are easily twice as efficient as the average vehicle on the road.

Numerous countries are providing models of the different components of Plan B. Denmark, for example, today gets 20 percent of its electricity from wind and has plans to push this to 50 percent by 2030. Similarly, Brazil is on its way to automotive fuel self-sufficiency. With highly efficient sugarcane-based ethanol supplying 40 percent of its automotive fuel in 2005, it could phase out gasoline within a matter of years.

With food, India—using a small-scale dairy production model that relies almost entirely on crop residues as a feed source—has more than quadrupled its milk production since 1970, overtaking the United States to become the world’s leading milk producer. The value of India’s dairy production in 2002 exceeded that of the rice crop.

On another front, fish farming advances in China, centered on the use of an ecologically sophisticated carp polyculture, have made China the first country where fish farm output exceeds oceanic catch. Indeed, the 29 million tons of farmed fish produced in China in 2003 was equal to roughly 30 percent of the world’s oceanic fish catch.

We see what a Plan B world could look like in the reforested mountains of South Korea. Once a barren, almost treeless country, the 65 percent of South Korea now covered by forests has checked flooding and soil erosion, returning a high degree of environmental stability to the Korean countryside.

The United States—which retired one tenth of its cropland, most of it highly erodible, and shifted to conservation tillage practices—has reduced soil erosion by 40 percent over the last 20 years. At the same time, the nation’s farmers expanded the grain harvest by more than one fifth.

Some of the most innovative leadership has come at the urban level. Amsterdam has developed a diverse urban transport system; today 35 percent of all trips within the city are taken by bicycle. This bicycle-friendly transport system has greatly reduced air pollution and traffic congestion while providing daily exercise for the city’s residents.

Not only are new technologies becoming available, but some of these technologies can be combined to create entirely new outcomes. Gas-electric hybrid cars with a second storage battery and a plug-in capacity, combined with investment in wind farms feeding cheap electricity into the grid, could mean that much of our daily driving could be done with electricity, with the cost of off-peak wind-generated electricity at the equivalent of 50˘-a-gallon gasoline. Domestic wind energy can be substituted for imported oil.

The challenge is to build a new economy and to do it at wartime speed before we miss so many of nature’s deadlines that the economic system begins to unravel. This introductory chapter leads into five chapters outlining the leading environmental challenges facing our global civilization. Following these are seven chapters that outline Plan B, both describing where we want to go and offering a roadmap of how to get there.

Participating in the construction of this enduring new economy is exhilarating. So is the quality of life it will bring. We will be able to breathe clean air. Our cities will be less congested, less noisy, and less polluted. The prospect of living in a world where population has stabilized, forests are expanding, and carbon emissions are falling is an exciting one.

Reprinted with the kind permission of the author.

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Lester R. Brown, founder and President of Earth Policy Institute, has been described by the Washington Post as “one of the world’s most influential thinkers”and as “the guru of the global environmental movement” by The Telegraph of Calcutta.

The author of numerous books, including Plan B: Rescuing a Planet under Stress and a Civilization in Trouble where he develops a vision for an environmentally sustainable economy, chapters, articles, etc., he helped pioneer the concept of environmentally sustainable development. 

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