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Lester Brown on How Climate Change Is Catastrophically Straining the Global Food Supply

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Lester Brown, founder and president of the Earth Policy Institute

Throughout his distinguished career, Earth Policy Institute founder and president Lester Brown has sought to protect resources across the globe. This morning in his opening address at the World Conference on Disaster Management in Toronto, he stressed the importance of one that may now be as important as any ocean, rainforest or glacier. “Time is our scarcest resource,” said Brown on the urgency for the world to begin mitigating the effects of climate change. “How much do we have? No one knows for sure. When do we reach the point of no return. We don’t know.”

The theme of disaster prevention and catastrophe management will be at the forefront of all discussions that take place this week at the conference. But in Brown’s view, there is one disaster that supersedes all others: runaway climate change. To him, that’s “the Big D … the one that could end civilization.”

In addition to the ticking clock and the world’s inability to meaningfully cooperate on the issue, what makes the threat of climate change so catastrophic today is the volatility it places on the global food supply. More than ever, the world grain supply is being strained. And this comes at the same time that demand is increasing.

In the past, major grain surpluses for U.S. production could make up for unexpected droughts, floods or fires that wipe out crop yields in other areas of the globe. Today, however, those surpluses no longer exist. And this is likely the new normal.

To drive home his point, Brown highlighted the massive heat wave, drought and wildfires that wiped out 40% of the Russian grain harvest last summer. He said that if someone had told him before the disaster that the average temperature in Moscow in July would be 14 degrees Fahrenheit above average, he wouldn’t have believed it. “I’m not a climate denier, but that’s unreasonable,” is how he said he would have responded. “Well, that’s what happened.”

In and of itself, that supply shortage affected global prices and stressed the market. But if a similar event were to occur in Chicago? Grain prices would go through the roof.

Again, in the past, agriculture speculators could just chalk up such events as anomalies. Maybe a disaster wiped out some percentage of the global supply that year, but they could be confident that the next season would balance things out. Brown doesn’t seen that happening anymore, however. “There is no normal to go back to,” he said. “The climate is in a constant state of flux.”

And even without a single, identifiable disaster like the one in Russia, the future of the global food supply is troubling. Brown said that estimates project a 10% decrease in grain crop yields for every additional degree Celsius increase in global temperatures. “Each year, agriculture and the climate are more out of sync,” said Brown.

That’s not the only bad news on the supply side.

There is also an irrigation bubble that means today’s global output is artificially high. The United States, China and India are the three top grain-producing nations in the world. Only one-fifth of the U.S. grain yield comes from irrigated land. Even if the continually strained Colorado River basin or Mississippi River region were to dry up somewhat, the nation could still produce at nearly the same level it does today. It’s a different story in India and China, however, according to Brown.

World Bank data says that in India there are 175 million people being fed with grain produced by the over-pumping of local aquifers. The Earth Policy Institute estimates that number at 130 million in China.

It doesn’t take a scientist to see that this is unsustainable. Eventually, the aquifers that are being aggressively pumped will be depleted and, once they are, the rate of irrigation will only be able to match the natural aquifer’s rate of recovery, says Brown. So eventually the current levels will have to fall. The irrigation bubble will burst.

“That bubble has already burst in Saudi Arabia,” he said, adding that the nation will likely be out of the grain production business altogether in just a few years. Since Saudi Arabia only produces 0.5% of the world’s global grain supply, this won’t significantly hamper the global market. And if anyone can afford to import, it’s the Saudis. But this, in addition to depleting water tables throughout the the Middle East, and the bubbles in China and Israel, spells trouble.

“We are only one harvest away from chaos,” said Brown.

Additionally, demand is increasing. Throughout the developing world, particularly in India and China, there are hundreds of millions of people rising out of poverty who will greatly inflate the world’s middle class in the coming decades. Along with a larger middle class comes more people wanting to live a middle-class standard of life. Perhaps more than anything, this affluence will lead to greater food consumption. And since grain feeds both people and livestock, grain consumption per capita will only rise.

Then there are biofuels. In this sense, ethanol is a non-solution solution. It may cut down on carbon dioxide emissions. But crop yields are now being divided between the dinner plate and the gas tank.

The grim reality of all this is that, as the global food supply becomes more strained, so will nations. Food supply security is something that citizens demand from their government and if it disappears, so could the social order, leading to more failed states. “How many failing states before the whole system begins to unravel?” said Brown. “We don’t know this yet. We haven’t been there.”

And that’s the scariest part of all.

(In addition to listening to Lester Brown’s keynote address at the 2011 WCDM, I had the chance to interview him to get even more insight about climate change and the global food supply. Our Q&A will appear in the July/August issue of Risk Management magazine.)

2010 Disasters Cost the World $218 Billion and the Insurance Industry $43 Billion

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Swiss Re’s latest sigma study (full report; abstract) reveals that the final economic losses resulting from disasters (both natural and man-made) across the globe in 2010 was $218 billion — a number that dwarfs the $68 billion in damages caused by catastrophes in 2009.

With unprecedented flooding, Asia was the region worst hit, with $75 billion of the total occurring there. In relative terms, however, the fallout may be worse for the Latin America/Caribbean region. The $53 billion caused by the earthquakes in Haiti and Chile represents a staggering 1.1% of the region’s GDP. (By comparison, Asia’s billion in losses was only 0.

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28% of its GDP.)

Here is Swiss Re’s regional breakdown of the number of disasters, death toll and financial fallout.

Insured losses in 2010 totaled $43 billion as a whopping 10 different events caused insured losses of at least $1 billion. This was a huge jump from the $27 billion in insured losses for the global industry in 2009.

In all, 2010 had 304 catastrophic events.

The globe has seen a troubling trend of more natural catastrophes nearly every year in recent decades, and 2010 was no different with 167 natural disasters. On the flip side, the declining trend of man-made disasters the world has experienced since 2005 also held true, with just 137 man-made events. This is perhaps the only positive nugget of information in the entire report. (Although even this silver lining is bittersweet as you will see below when we look at the resulting death toll.)

Worst of all, of course, were the 304,000 people killed by disasters last year, making 2010 the third deadliest year since 1970 (the year Swiss Re first began collecting such data).

In 2010, severe catastrophes claimed significantly more lives than the previous year: around 304,000 were killed, compared to 15,000 in 2009. The deadliest event in 2010 was the Haiti earthquake in January, which claimed more than 222,000 lives. Nearly 56,000 people died during the summer heatwave in Russia. The summer floods in China and Pakistan also resulted in over 6,200 deaths.

Man-made disasters accounted for a small percentage of deaths last year, in relative terms, but the 6,446 killed was still a significantly higher number than the 5,970 who died in this manner in 2009. This fact puts a large blemish on the positive news that there were fewer man-made events. There may have been fewer incidents, but the ones that did occur were deadlier and that lower-occurrence/worse-outcome ratio should be going the other way in 2011 as safety, security and other risk management means strive to lessen the impact of catastrophes.

The man-made disasters that claimed the most victims in 2010 were a lead poisoning outbreak at an illegal gold mine in Nigeria in March (400 victims, mainly children), a stampede on a bridge at a festival in Cambodia in November (375 victims) and the collapse of a gold mine in Sierra Leone in March that killed approximately 200 people. Meanwhile, aviation and maritime disasters accounted for more than 800 and 1,100 victims respectively.

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Moving beyond the past, the globe has already been badly battered so far in 2011.

The Japanese earthquake and tsunami killed an estimated 18,500 people and caused upwards of $30 billion in insured losses alone, according to some experts. The Christchurch quake in New Zealand also ravaged the insurance industry, Australia floods cost billions and winter storms in the United States did plenty of damage of their own.

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Who knows what the final fallout will be from social revolutions in the Middle East, but it’s safe to say that there will be some claims.

All this and it’s not even hurricane season yet.

Hopefully, there is no way that more people will be killed by disasters in 2011 than we saw in 2010. But when it comes to economic losses, specifically insured losses, it is already shaping up to be a historic, market-altering year.

Transportation in India: No Good Options

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india traffic

“Organized” chaos

A few weeks ago, a report came out that — once again — India led the world in traffic deaths. Given its population (estimated at nearly 1.2 billion, which puts it behind only China), the nation would logically be near the top of the list regardless of any priority it placed on safety. In fact, when India took over the number one spot for road fatalities (from China) in 2006, many people saw this as further evidence that India was truly becoming a economic power.

While having many of you citizens die on the road is obviously counterintuitive to progress, more people driving meant more people were buying cars because more people had more money. Safety needed to be improved, sure, but automobile transportation is always going to lead to some casualties that correlate to population and/or what percentage of that population has purchasing power great enough to afford a luxury like a car.

Anyone who subscribed to that theory five years ago, however, is probably starting to see India’s high death rate for what it is: tragic and avoidable. This New York Times article breaks it down.

While road deaths in many other big emerging markets have declined or stabilized in recent years, even as vehicle sales jumped, in India, fatalities are skyrocketing — up 40 percent in five years to more than 118,000 in 2008, the last figure available.

A lethal brew of poor road planning, inadequate law enforcement, a surge in trucks and cars, and a flood of untrained drivers have made India the world’s road death capital. As the country’s fast-growing economy and huge population raise its importance on the world stage, the rising toll is a reminder that the government still struggles to keep its more than a billion people safe.

In China, by contrast, which has undergone an auto boom of its own, official figures for road deaths have been falling for much of the past decade, to 73,500 in 2008, as new highways segregate cars from pedestrians, tractors and other slow-moving traffic, and the government cracks down on drunken driving and other violations.

It has been illustrated through various means time and time again, but this is just one more example of how India’s city planners and public officials are failing to provide adequate infrastructure to support the nation’s booming economy.

Unfortunately for Indians, roadways aren’t the only transportation problem. As you can see in the video below, the trains are not a much better option. Marked by overcrowding and delays, it takes workers who commute to the major cities an exorbitant effort just to make it to their jobs every day. Worse still, there are still many political and religious-based attacks on railways in many regions. The 2006 Mumbai bombings, for example, killed more than 200 and injured another 700.

A few weeks ago I went to the annual meeting of Coface, a company that specializes in international credit risk. As it does each year, Coface brought in a group of experts to talk about the most pressing global economic issues and professor David Denoon of New York University spoke about China and India, painting a much different development picture of the world’s two most populous locales.

China, he said, is characterized by places like Shanghai, where just in recent years alone construction has begun on more high rises than exist in all of Chicago. By contrast, he emphasized that the per capita income in India is merely $3,100. That’s equal to one-third of the average income in Brazil and one-fifth the average in Russia.

Looking at those numbers, it seems that both infrastructure and income distribution will pose a growing concern for the nation that puts the I in BRIC.*

* (The acronym for the world’s four biggest emerging economic powers, Brazil, Russia, India and China. Also, for a look at some of the risks that have plagued the largest Indian carmaker, check out Bill Coffin’s look at Tata Motors’ “Cheap Cars, Costly Protests.”)

The Seven Strangest Man-Made Disasters

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Yesterday, Emily did a post recounting Aon’s list of the top five global hotspots for earthquakes. Given the seemingly relentless seismic activity and destruction wrought by shifting tectonic plates just in 2010 alone, such natural disasters should be high on everyone’s watch list.

But as we are seeing right now in the Gulf, man-made disasters can present enormous perils of their own. And it just so happens that I came across Spike’s list of “The Top Seven Most Bizarre Man-Made Disasters” today.

You can head over there for a full rundown of all the incidents (including Bhopal, the Texas City devastation and the new-to-me Boston “Molassacre”), but these are the three I find most interesting.

3. The Gates of Hell

This pit of fire that has been burning for 40 years looks more like something out or Mordor than Turkmenistan. But the burning crater of natural gas began shortly after a Russian drilling rig collapsed into the Underworld and no one knew what to do.

Having opened this huge poisonous gas cavern up, the atmosphere and the nearby residents in the village of Derweze decided the next logical move would be to set this huge crater on fire, and it has been burning ever since.

Sure, light it on fire. Why not? What could go wrong? Seems logical enough.

Here’s video of some tourists enjoying the incredible, football-field-wide hole to hell (not literally).

Yikes.

2. The Centralia Underground Coal Fire

Our former publisher and Pennsylvanian Bill Coffin used to talk about this one all the time, so I have been familiar with its existence for some time. Nevertheless, it’s completely nuts. Like the Gates of Hell, it has been burning for decades — since 1962 in fact. But unlike the Turkmenistan fire, its genesis is not so clear.

It is suspected to be a blunder by the local fire department in 1962 which had been tasked with cleaning up the local landfill, which itself sat on top of an abandoned strip mine. To accomplish this, they set the landfill on fire, apparently not an unheard of method at the time. However, the theory goes that the fire was not put out properly, and heated up veins of coal underneath the landfill, which began to smolder over time.

Eventually the reaction lit an underground fire which continued to burn, which caused little concern from local authorities until almost two decades later when in 1981, a 12-year-old boy fell into a 150-foot sinkhole which suddenly opened up in the backyard underneath his feet.

“Blunder” seems to be putting it lightly. A “blunder” is forgetting to send out an email before you leave work for the night. A “blunder” is perhaps running into a parked car while trying to do a u-turn. Or a “blunder” may even be leaving the iron on when you run out the door on the way to brunch. Accidentally igniting a 1,200-degree coal fire that has burned for a half century — and is expected to continue burning until around 2260 — is more than a “blunder.”

I think we can all agree that it should at least be considered a “my bad.”

Centralia Pennsylvania Sign

An actual sign in Centralia, PA.

1. The Great Pacific Garbage Patch

This is one of the neatest, worst things I have ever found out about. Discovered by chance by Captain Charles Moore some 12 years ago, the Great Pacific Garbage Patch is an unfathomably immense, floating, amorphous collection of trash in the middle of the planet’s largest ocean. It is located between Hawaii and California due to the fact that that is where multiple sea currents meet — and there the (mostly) plastic mass churns in the water at twice the size of Texas.

Pretty cool, huh? But sorry, folks, it’s not all beautiful pollution.

There is also a downside.

Over the decades the garbage patch has been developing, much of the debris has been broken down into smaller and smaller particles, comprised largely of various kinds of plastics, which is then mistaken for food by the marine life, which in turn contaminates the ecosystem all way up the food chain.

Since the area is so massive in scale (both in terms of width and depth underwater), many scientists believe it is nearly impossible to cleanup the contamination at sea, and that it would likely do even more damage to the surrounding sea life in the process. When people talk about our need to recycle plastics, this is why.

All cavalierness aside, this is obviously a terrible problem and represents one of the unforeseen — and, until relatively recently, unknown — risks of our modern society. What can be done? Who knows. Perhaps nothing. But it’s just another lesson for all of us about what types of unexpected disasters can compile — little by little, day by day — when you’re no one is paying attention.

Below, Cpt. Moore speaks about the problem with Stephen Colbert.

Stephen speaks much truthiness.