In a new report entitled ERISC Phase II: How food prices link environmental constraints to sovereign credit risk, it states that food price shocks caused by a growing imbalance between supply and demand, increasing world population, particularly in Developing World countries, and climate change will have a severely disruptive impact on many nations. The worst of these will be felt in Africa. The report cites that 17 of the 20 countries most a risk are to be found there and five in particular: Benin, Nigeria, Cote d’Ivoire, Senegal and Ghana, will see the greatest percentage decline in their gross domestic product (GDP). In Egypt and Morocco food prices will more than double. Countries will increasingly suffer from enormous negative trade balances, see their currency reserves depleted, and experience increasing impoverishment. Their populations will become dependent on the largess of the rest of the world or face mass starvation. And these conclusions don’t include the current droughts impacting East Africa where Ethiopia, Somalia and South Sudan are facing famine. The negative impact on Africa needs to be understood in its larger global impact because it is this continent that will experience the largest population growth throughout the 21st century while seeing its native food sources most challenged by climate change.
Climate change is considered the most significant threat. The report states that some areas of the planet may benefit from rising temperatures, but the overall negative effect “will pose the greatest risk to food production.” That’s because climate change and its accompanying extreme weather events will increase variability in annual crop yields. It will impact the entire agricultural process from the growing to harvesting to processing. Most impacted will be cereal crops, the bulk of the world’s food supply. The report states, “It is estimated that each decade of climate change will reduce mean agricultural yields by 1 per cent, whereas the demand for food is forecast to increase by 14 per cent per decade.”
The map below identifies those areas of the planet most vulnerable to climate change. Access to fresh water is cited as the most significant delimiter followed by a decline in arable land and the constraints that climate change mitigation and adaptation will put on agriculture.
The food problem isn’t limited to Africa. Food price shocks will be shared by many countries. The report indicates that China and India alone will see their absolute gross domestic product (GDP) decline by $161 billion and $49 billion U.S. respectively because of rising food prices. In 23 other countries, a doubling in prices will impose a 10% or higher rise on their consumer price index.
But not all countries are to feel the same amount of pain. The report cites three in South America: Paraguay, Uruguay, and Brazil, plus Australia, Canada and the United States, as being least impacted by rising food prices. Of these the U.S. is the only one expected to see a GDP hit, forecast at $3 billion, 1/50th the impact China will experience.
Why these 6 countries? Because they, currently and for the foreseeable future, are expected to be major producers of food surpluses. The last four cited can be even called beneficiaries from climate change because they are disproportionately large consumers of energy and the natural resources responsible for the bulk of greenhouse gas emissions. That issue of disproportionate responsibility was partially addressed at COP21 in Paris with the creation of a Green Climate Fund. But how effective will the fund be created in a non-binding agreement?
What solutions are there to a growing food crisis? A new United Nations report, with contributions from 34 of the world’s leading scientists and 30 countries is to be released in less than a week. This new report will describe numerous strategies to improve world food supply.
If you don’t believe me read Denial: Self-Deception, False Beliefs and the Origins of the Human Mind. The authors, Ajit Varki and Danny Brower, hypothesize that denial comes out of awareness of our mortality and our natural aversion to believing in it. This characteristic has often been thought to be unique to humans, but it appears that some species of birds, elephants, dolphins and probably bonobo chimpanzees also display self awareness. It explains why cigarette smokers continue to smoke in denial of the link to cancer. And it explains religion which serves as an instrument of self deception as we deal with life and the certainty of our inevitable death.
So we go on and on in this state of denial even in the face of overwhelming evidence such as we have for climate change, clinging to the 5% uncertainty in the recent IPCC Report, just like smokers. Our leaders are as good at denial as we regular citizens. So they dither or pay lip service to the issue of climate change and the impact it will have on every aspect of human existence, from where we live, to the air we will breathe, and to the food we will eat.
It is not just the wonky weather that accompanies climate change that represents a threat. It’s the impact that a warmer earth will have on agriculture production across the planet. Because just like the natural biology of the planet which will have to adapt to rising temperatures so will the vegetation we humans plant and the animals we husband to support our dietary needs. The latest draft of the Intergovernmental Panel on Climate Change (IPCC) which will be released shortly predicts growing environmental risk on global food production. This is a new conclusion from previous interim reports that indicated that losses in tropical areas of the world would be offset by gains in more temperate climates, evening out the issue of food production.
No more. Because human population growth is heavily skewed to those very tropical countries where agriculture will be most impacted. These are countries that feature a large percentage of the population living well below the poverty line. If agricultural production starts declining in these countries two things will happen. Food will get very expensive with all the consequences that entails. And we will see food refugees migrating to other areas of the planet.
Here are the facts according to the IPCC. Agricultural production is expected to decline by 2% per decade for the rest of the 21st century. Food demand on the other hand is expected to rise by 14% per decade, not just because we will see an additional 2.5 billion added to our human population, but also because changes to diet in the Developing World where improving incomes will lead to a more Western-like diet.
For humanity to meet the demand in tropical zones it will probably lead to more of Amazonian, African and South Asian forests vanishing as new land is put into production. And cutting down the trees in these areas will, as we know, accelerate climate change by releasing more CO2 into the atmosphere while removing the largest sink needed to sequester the carbon that will be produced.
But not to worry! Denial and self deception, not changes in policy and behaviour will get us through.
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