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Famine and Water Riots Are Coming, Warns New IPCC Intergovernmental Report

The Intergovernmental Panel on Climate Change (IPCC) has released a new report on the state of the global environment. One of their most important messages is that we need to prepare for famines and water shortages in the coming decades.

Photo, above, of California’s low water levels due to drought this year, by Randall Benton, Sacramento Bee.

The Guardian‘s John Abraham and Dana Nuccitelli have a great guide to the report. They write:

The report discusses the risk associated with food insecurity due to more intense droughts, floods, and heat waves in a warmer world, especially for poorer countries. This contradicts the claims of climate contrarians like Matt Ridley, who have tried to claim that rising carbon dioxide levels are good for crops.

While rising carbon dioxide levels have led to ‘global greening’ in past decades and improved agricultural technology has increased crop yields, research has indicated that both of these trends are already beginning to reverse. While plants like carbon dioxide, they don’t like heat waves, droughts, and floods. Likewise, economist Richard Tol has argued that farmers can adapt to climate change, but adaptation has its costs and its limits. In fact, the IPCC summary report notes that most studies project a decline in crop yields starting in 2030, even as global food demand continues to rise.

The report also discusses risks associated with water insecurity, due for example to shrinking of glaciers that act as key water resources for various regions around the world, and through changing precipitation patterns. As a result of these types of changes, the IPCC also anticipates that violent conflicts like civil wars will become more common.

Here’s a chart from the report tracking likely decreases in crop yields over time, if climate change continues unchecked.

Essentially, climate change is going to decrease our supply of food and water. And this, the IPCC suggests, will foment civil unrest and could lead to more armed conflicts than we have now.

Other looming threats include greater risks of flooding, ocean acidification, and animal extinctions.

It seems clear that mitigating climate change doesn’t simply mean curbing our fossil fuel emissions and agricultural runoff into the oceans. We’re also going to need to figure out new ways to improve our food and water security. Perhaps the breakthrough technologies of the twenty-first century will involve genetic tweaks that make plants more resistant to drought, and cheap ways to recycle or purify water.

If we can’t agree on what to do about climate change, one has to hope that we can unify around what to do about hunger and thirst.

Read the entire IPCC report [PDF]

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Sustainability as an Investment Class

 

Inflation for breakfast – deflation for the rest of the day

I have been following the rise in food commodity prices recently and if we look at the CRB (Commodity Research Bureau) foodstuffs index we see that it entered 2014 at around 365 and as of last night’s close is at 421.85. So up by just under 16% in the year so far. It has been quite a sharp bounce back from the previous downwards trend that began in the spring of 2011 and we have now regained the drops of 2013.

It appears that these price rises have affected the breakfast habits of at least one journalist on the Financial Times.

“Everything we have for breakfast is up,” said Abdolreza Abbassian at the UN Food and Agriculture Organisation of the increases of coffee, orange juice, wheat, sugar, milk, butter, cocoa and pork. “This has all happened unexpectedly but shows how quickly things can change.”

Apparently the power of the stomach has defeated the usual theme of the Financial Times. Also we see a familiar word with the price rises so step forwards one more time “unexpectedly”. As we look into the detail we see this.

Coffee has soared more than 70 per cent because of unseasonably dry weather in Brazil, while US pigs have been hit by a virus epidemic, leading to a more than 40 per cent rally in Chicago pork prices.

We have discussed before the increasing demand for pork from China as its economy grows so perhaps that too has been an influence here. Also events in the Ukraine have led to upwards pressure on wheat prices as fears of a supply disruption there have helped drive wheat prices (Kansas City) up by 22% since the beginning of February. Those of us who drink tea for breakfast rather than coffee can have a small smile of satisfaction as our preferred tipple or caffeine injection has risen by much less. Indeed the pattern over the past year has been rather different indeed. From the Kenya Broadcasting Corporation.

Tea farmers should brace for reduced bonus this year following an oversupply that has seen prices drastically fall over the last one year…..Tea prices at the Mombasa auction have suffered a 30% decrease since July 2013 as a result of increased supply.

However whilst disinflationistas may be feeling better I have a troubling thought which is that the breakfast tea I prefer has risen in price. Surely some mistake? No this represents the way of an increasingly complex price pattern and delivery in these times and as it currently has a special offer I took a supply from the shelves. Why? Special offers are often the supermarkets way of producing a fog over a price rise and the two are heavily correlated in my experience.Smoked Salmon Eggs Benedict

The Financialisation of it all

There is a familiar force at play here too. Again from the FT.

Financial speculators have started to pile into agricultural commodities, pushing net “long” or bullish positions to the highest level in four-and-a-half years.

This is a familiar feature of the credit crunch era where these forces have risen in power since the advent of policies like Quantitative Easing began but of course we are regularly told that this is a pure coincidence.

Some prices have fallen

Having covered the impact of China on the falling price of copper and iron ore there is this factor to add into the mix. This problem is, in many respects, building as the Yuan has dropped again to 6.20 to the US Dollar today. But there is an undercut which is that the CRB metals index has been falling at a slower pace (4%) than foodstuffs have been rising in 2014 so far.

 

Energy And Water Are Fundamentally Intertwined – Our Policy should reflect that

This commentary, authored by Kate Zerrenner, originally appeared on EDF’s Energy Exchange blog.

When I tell people that the best way to conserve energy is to conserve water, I am often faced with a confused response. I’m not surprised really. Energy and water policies are rarely discussed in the same forum. For a long time, we’ve overlooked the inextricable relationship between water and energy use. Coal, nuclear and natural gas plants use enormous amounts of steam to create electricity. Producing all of that steam requires 190,000 million gallons of water per day, or 39% of all freshwater withdrawals in the nation.

Connection between energy and water

The longstanding division between energy and water considerations is particularly evident in the case of energy and water management. These resources are fundamentally intertwined: Energy is used to secure, deliver, treat and distribute water, while water is used (and often degraded) to develop, process and deliver energy. Despite the inherent connection between the two sectors, energy and water planners routinely make decisions that impact one another without adequately understanding the scientific or policy complexities of the other sector. This miscommunication often hides joint opportunities for conservation to the detriment of budgets, efficiency, the environment and public health, and inhibits both sectors from fully accounting for the financial, environmental or social effects they have on each other.

This lack of collaboration between energy and water planners is especially dire considering Texas is in midst of an energy shortage that is exacerbated by the multi-year drought. Without adequate planning, we could someday have to choose between keeping our lights on and turning on the faucet.

Need for efficiency

Source: NY Times

 

Energy and water infrastructure upgrades are expensive, and this reality continues to stifle the transition to a more water and energy efficient system. Energy and water policies at both the federal and state levels were developed to support existing electricity generation and water technology, but conditions have changed dramatically and the policies haven’t kept up.

Competitive markets, new technologies, resource constraints and increasing greenhouse gas emissions are all part of the new planning reality, but are not adequately addressed when energy and water planning are carried out in siloes. At the most basic level, even the language between the two sectors does not match up, making it difficult for energy and water planners to speak to each other effectively. But don’t think this lets regulators and policymakers off the hook.

Policy

There have been calls for joint water and energy resource management. In 2011, the U.S. Energy and Water Research Integration Act was formulated “to ensure consideration of water intensity in the Department of Energy’s energy research, development, and demonstration programs to help guarantee efficient, reliable, and sustainable delivery of energy and water resources.” Although it was not enacted into law, this bill put the energy-water nexus on the national stage. Later, in the 2013 Texas legislative session, Senator Kirk Watson nearly passed a bill (Senate Bill 199) that would have required electricity generators to report their water use and needs annually. While some lawmakers have a clear vision to address energy and water needs together, we lack a consensus and broad understanding among stakeholders to make that vision a reality.

To compound the problem, energy and water resources are managed at multiple levels—local, regional, statewide and national. Having these different planning and regulatory levels means more opportunities for miscommunication or misalignment of policy goals from each sector. Addressing energy and water on a more coordinated basis could help overcome language barriers between the two and ensure that each resource is more adequately protected.

Energy and water management is too crucial to be upheld by disjointed decision making that doesn’t look at the whole picture. While it may be difficult to breakdown the longstanding separation between energy and water management, doing so will reveal novel conservation strategies to ensure Texans – or anyone else for that matter – never have to choose between keeping our lights on or running water to meet our daily needs.

This is one of a group of posts that examines the energy-water nexus, Texas’ current approach to energy and water policy and what Texans can learn from other places to better manage its vital resources.

 

Monsanto Buys Climate Corp For $930 Million

singin-in-the-rainWho knew betting on the weather could make a billion dollars? It just did for The Climate Corporation, which underwrites weather insurance for farmers. Monsanto, broke the news this morning that it was buying Climate for approximately $930 million. The idea is to sell more data and services to the farmers who already buy Monsanto’s seed and chemicals. Climate (formerly known as Weatherbill) has raised $107 million from a plethora of backers since it began fund raising in 2007. Its biggest investors include Khosla Ventures, Google Ventures, Index Ventures and Founders Fund.

Climate’s cofounders were early Google employees who saw a self-service approach to weather insurance, which had previously been sold in custom, over-the-counter negotiations. Clients go to its site and outline what range of temperatures and/or rainfall they want protection from, for a set period of time. In 100 milliseconds Weatherbill crunches forecasts and 30 years of National Weather Service and geological survey data for the user’s location. After adjusting–minutely–for climate change, Weatherbill names a price and acts as the underwriter. Policy holders get their checks automatically if the weather doesn’t go their way. Originally Climate pitched its insurance to any weather-dependent businesses (farmers, housepainters, golf ranges), but it soon realized its biggest market was in agriculture. “It had the most significant opportunity, the most significant product, and had the greatest impact,” cofounder David Friedberg told Forbes in a 2011 post.

Climate was a strategic pickup for Monsanto’s planned move into services and data. In its release this morning, Monsanto says data science could be a $20 billion revenue opportunity beyond its core business of seeds and chemicals. In the announcement today the company estimated that “the majority of farmers have an untapped yield opportunity of up to 30 bushels to 50 bushels in their corn fields… advancements in data science can help further unlock that additional value for the farm.” Monsanto grossed $13.5 billion in revenue in the year ending August 2012. It earned $3.50 a share last year and is expected to report earnings per share of $4.58 when it reports after the close today. The stock’s up 11% this year, short of the Dow’s performance.

Climate brings to Monsanto some impressive data expertise. “Climate Corp developed expertise in agronomy in order to understand how climate variability affects different crops,” Index Ventures partner Neil Rimer gushed about the deal this morning in a blog post. “To price its insurance products, Climate Corp’s platform ingests weather measurements from 2.5 million locations and forecasts from major climate models, and processes this data along with 150 billion soil observations to generate 10 trillion weather simulation data points, requiring it to manage 50 terabytes of live data at any given time. Needless to say, this company has built daunting barriers to entry.”

Click to read original Forbes article

 

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Despite gloomy financial news, green sectors are showing significant progress throughout

In spite of all the negative news coming out of the press (politicians not showing leadership, parliaments frozen, the financial sector reluctant to embrace so called “extra financial” investments), we continue to see good news in the impact investing space. We continuously see positive signals with regards to market growth, and movement towards dealing with Climate Risk and investing in ESG and Impact.

As of July 2012, $4.1 trillion has been privately invested in a greener, global economy, since 2007.

Renewable Energy as a sector is benefitting from reduced cost and greater efficiencies as well as from changing attitudes toward fossil fuels and diminished returns on investments. Green Construction is increasing significantly as the demolition subsector takes down outdated infrastructure. The Efficiency sector is adding material and water efficiencies boosting this sector.

As the world continues to invest at least $1 trillion per year until 2020, we are leaving the fossil fueled industrial era behind and are entering a new solar age – and not a minute to soon.

The August 2012 Supplement to the February 2012 report focuses on investments companies are making in green research and development (R&D). Click here to download The Green Transition Scoreboard®

Read the rest of this entry »

 

US Drought Update – Here we go again

US Drought Update – Here we go again

http://www.globalfundexchange.com/blog/2013/07/09/us-drought-update-here-we-go-again/

by anric

 

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