The Environment Canada Policy Research Seminar Series

Lester Brown March 4, 2004

Within the global environmental community, the World Watch Institute, founded by Lester Brown, has developed a unique role as a central clearinghouse of trusted reputable information and interpretations on the physical conditions of the earth in every region. Over the past 30 years, the Institute has come to be recognized for its annual State of the World reports which provide expert interpretations of current environmental trends.

Lester Brown himself has come to be known for his data-driven forecasts of what current trends foretell for future environmental health and living conditions around the world. In 2001, he founded the Earth Policy Institute with the goal of raising public awareness of trends adversely affecting the Earth to the point where it will support an effective public response. Brown's expressive, but matter-of-fact tone and transparent logic contain messages that are sometimes alarming.

For his address at Environment Canada, Lester Brown drew upon ideas from his recent book entitled "Plan B", which provides an alternative to the implicit A-Plan governing our consumption of the world's resources.

Lester Brown's central contention is that we are over-consuming the earth's natural capital through deforestation, over-grazing and desertification, over-pumping, and over-fishing. He predicts the first indication of serious trouble in the relationship between us and the natural systems on which we depend will be pronounced escalations in food prices within two years.

Environmental Limits Are Fast Approaching

For many years, those in the environmental movement have forewarned that if our resource use trends continue, we will eventually encounter ecological limits. However, it has not been obvious how these limits would affect us and how soon they would arrive.

Lester Brown's recent book adds specificity to the forecasts: limits will take the form of sharply rising global food prices, and this price escalation will arrive within two years. His presentation outlined some of the newer environmental trends, such as falling water tables and rising temperatures which will in turn drive economic trends that will have pronounced geopolitical consequences. He contends that we are close to facing some realities that, to date, we've been largely able to ignore.

Twin Challenges in Agriculture

Farmers are facing two new challenges to their productivity: water shortages due to aquifer depletion and rising temperatures.

1. Water Tables Falling Around the World
With the advent of diesel and electrical water pumps, it became possible to withdraw water from underground faster than aquifers naturally recharge. Though over-pumping allows us to expand food production in the short run, it virtually guarantees a decline in food production in the long run when aquifers are depleted.

Over-pumping is occurring in an alarming number of countries throughout the world. In parts of the North China Plain, water levels are dropping by ten feet per year, which is particularly disturbing since this region produces half of China's wheat and one-third of its corn. India is over-pumping in every state except in the northeast. There is extensive over-pumping in the southern Great Plains of the U.S. In fact, over half of the world's people live in countries where water tables are falling.

2. Food Production in a Changing Climate
The agricultural sector will also face productivity challenges from rising average temperatures. Most models of the impacts of climate change on agriculture are based on climate model projections combined with broad assumptions about the effect of warming on crop production. However, more recent research in the last two years from the International Rice Research Institute and the U.S. Department of Agriculture indicate that for each one degree Celsius rise in temperature during the growing season above the optimum, we get a 10 percent decline in grain yield for wheat, rice, and corn. It's not surprising that in the last two years, there have been substantial reductions in the global harvest because of heat- and drought-induced reductions. For instance, in France through the Ukraine, the August 2003 heat wave dramatically lowered the grain harvest.

Food Shortages

These twin challenges are making it difficult for farmers to expand production. Indeed, in the last four years, world grain production fell short of consumption - by 16 million tonnes in 2000, 27 million in 2001, 93 million in 2002, and 105 million in 2003 (or 5 percent of world grain consumption). After four years of drawing down grain stocks, they are at their lowest levels since 1972. If the world's farmers this year cannot make up this 100-million-tonne a year shortfall, quite simply, there will not be enough grain to go around and intense competition will result among the 100 or so countries that import grain, thereby escalating the price.

Importing Water through Grain

Water scarcity, though historically a local issue, is starting to cross national borders via the international grain trade. As countries start to exhaust their water supplies, particularly in North Africa, the Middle East and China, they are coping with the growing water needs of their cities by diverting water from agriculture. Thus if we're facing a future of water shortages, this will also mean food shortages.

The resulting shortfall in agricultural production will need to be balanced by imports of grain. By importing grain, a country is, in effect, importing water since it takes a thousand tonnes of water to produce just one tonne of grain. Indeed, the most efficient way to import water is in the form of grain.

China Becomes the Key Player

Brown predicts the wake-up call will come when China turns to the world market for massive quantities of grain. China's grain production, which miraculously increased from 90 million tonnes in 1950 to 392 million tons in 1999, has now dropped to 322 million tons. That 70-million-tonne drop exceeds the entire Canadian grain harvest. To put it in perspective, the largest importer of grain in the world today is Japan, which imports less than half this level (26 million tonnes). The Chinese have been covering their declining production by drawing down their stocks, but they can only do this for maybe one more year. China, the world's most populous country, will end its history of food self-sufficiency by turning to world grain markets in a major way.

Out of necessity, China will need to turn to the U.S. since it accounts for nearly half the world's grain exports. A fascinating geopolitical scenario is starting to unfold: Chinese consumers, who have a $100 billion trade surplus with the U.S., enough to buy its entire grain harvest twice, will be competing with Americans for their own grain. The intense competition for foodstuffs will likely drive up food prices.

In past decades, the U.S. may have reacted by simply restricting exports of grain to China. But in the present world order, the U.S. has an interest in keeping China politically stable since the Chinese economy is the engine powering the Asian economy. Indeed, in recent years, the Chinese economy is the only large economy in the world that has grown rapidly for an extended period, so China is now beginning to become a global economic engine. In fact, if you use purchasing power parity instead of conventional exchange rates to compare the size of the world's economies, China is now the second largest in the world, second only to the U.S.

Lack of Precaution Around the World

Brown is perplexed that the sequence of events the fall in water tables could trigger has not caused any country to initiate a concerted effort to raise water productivity and to further slow population growth to re-establish balance.

Brown believes the wake-up call that our environmental limits have been reached will come within the next two years. The troubling question is: "What can we do to cope with these imminent environmental limits?"

Solutions: Plan B

Brown's 2003 book entitled "Plan B: Rescuing a Planet Under Stress and a Civilization in Trouble" proposes a plan to cope with the environmental limits we presently face.

Brown's Plan B has three components:

1. Raise Water Productivity
Water must be used more productively throughout the economy, and most importantly in agriculture. This would be similar to the effort we launched in the middle of the last century to raise land productivity. Grain yield per hectare went from 1.1 tonnes per hectare in 1950 to 2.8 tonnes per hectare in 2003.

2. Stabilize Population
Of the 3 billion person increase in the world's population projected by 2050, the vast majority will be added in countries where water tables are already falling and wells are going dry. To avoid adding greater population stresses, we need to provide family planning services and to create the social conditions for accelerating the shift, that is, universal education and basic health care for all youngsters, importantly young females.

3. Climate Stabilization
Brown proposes we cut carbon emissions in half by 2015. Though challenging, Brown provides several examples of how this could become a reality. First, if we were to replace incandescent light bulbs with the compact fluorescent bulbs that use less than a third as much electricity, we could close hundreds of coal-fired power plants. Second, if we were to raise the fuel efficiency of automobiles in the U.S. to the level of present hybrid vehicles, we would cut gasoline use in half. Over the longer term, hydrogen must be the fuel choice for the future. Service stations could be adapted to produce their own hydrogen with electricity, water and a compressor. Internal combustion engines in the cars on the road now can easily be converted to hydrogen for just a modest sum. Third, wind will emerge as the world's leading power source because it is abundant, cheap, inexhaustible, widely distributed, clean, and climate-benign. Canada is particularly well-poised to benefit from wind power with its high wind to population ratio.

The Challenge Ahead

Brown likens the challenge we face due to our excessive patterns of consumption to deflating a bubble before it bursts. The key question is: "Can we make the shift?" We may find ourselves in the situation within the next few years where we will have to move at wartime speed to address our environmental challenges.

Massive reorientations in our patterns of economic production and consumption are not unprecedented. In early 1942, U.S. President Franklin Roosevelt laid out America's goals for arms production, namely to produce 45,000 tanks, 60,000 planes, 20,000 anti-aircraft guns, and 6 million tonnes of shipping. At that time, the U.S. automobile industry represented the largest concentration of industrial power in the world. Roosevelt called together the leaders of the automobile industry and he said, "We're going to depend heavily on you to produce these arms." They replied "We'll do everything we can, but it will be a stretch producing cars and all these arms too." He responded, "You don't understand. We're going to ban the sale of private automobiles in the U.S." And that's exactly what happened. From April of 1942 to the end of 1944, there were almost no cars produced in the U.S. The entire industrial base was converted to arms production. It was an amazing transformation, and it happened not in decades, or even years, but in a matter of months.

They did it then and if we need to, we can do it now. The difference is that the threat that we're now facing may be even greater than the one that we faced in 1942. To put in perspective what is achievable, the U.S. defense budget in 2002 was $343 billion (which excludes the costs of operations in Iraq).

Brown's final point was that since September 11, 2001, political leaders and the media have been so focused on terrorism, and more recently Iraq, that we've almost forgotten the environmental trends that are undermining our future. Brown concluded with the final thought "If Osama bin Laden and his colleagues succeed in diverting our attention from these trends that are undermining our future, they may well succeed in reaching their goals in ways that even they did not imagine."