When Resource Constraints Meet Conspicuous Consumption

The world appears to be in the midst of transitioning from one of relative surplus to one of scarcity. For many countries in the external pagecoming 15-20 yearscall_made, "[a]ccess to relatively secure and clean energy sources and management of chronic food and water shortages will assume increasing importance." While such longer-term forecast reports focus on the not-so-distant future, signs of scarcity in important resources like water, energy and food, are already manifesting:

• The European Commission issued a external pagepress releasecall_made in June warning of a shortage of 14 critical raw mineral materials that could negatively impact European industries, technologies and innovation.

• Food shortages are expected in Russia and Pakistan, and other parts of Asia and Africa.

• Power shortages have become commonplace around the world during seasonal demand peaks.

The external pageFood and Agriculture Organizationcall_made defines scarcity as "an imbalance between 'supply' and 'demand' that varies according to local conditions." It goes further by clarifying that scarcity is relative and is shaped by the factors of availability, access and infrastructure (inadequacy). Definitions are valuable, news headlines are interesting and the international community's long-term assessments are compelling. But what story do the numbers tell about scarcity?

Water

Today, in the developed world, the average adult uses some 1,800-2,500 m3 of water per year.

By 2025, 1.8 billion will be living with absolute water scarcity, with access to less than 500 m3 per person/year; while two-thirds of the world's population will live "external pageunder stresscall_made" with only 500-1,000 m3 of water per person/year. Given that it takes some 16,000 liters of water to produce external pageone kilogram of beefcall_made (for the animal's consumption, care, and grain feed production), it will be much harder in 2025 to ignore the immediate social, environmental and human cost of beef production.

The NIC's Global Trends 2025 external pagesayscall_made:

Clean water is set to become the world's scarcest but most-needed natural resource because of new demands resulting from population increases and expectations that climate changes will reduce natural fresh water sources in some areas. Demand will increase for water for domestic use, as well as for agriculture (including new biopharma and biofuel crops) and industry processes.

Food

The OECD-FAO forecast report "external pageAgricultural Outlook 2010-2019call_made" notes that in this one decade food production will just meet food consumption, with world demand likely to exceed supply for wheat and sugar. This report assumes crop production will be stable during this period, and cannot anticipate the impact of environmental or economic shocks. (Such as Russia's decision in August to halt exports of wheat as a result of a loss of 20 percent of its annual wheat crop due to drought. Russia is one of the largest producers of wheat in the world.)

Energy

The US Energy Information Association's "external page2010 International Energy Outlookcall_made" anticipates world energy production will increase by 40 percent in the next 25-30 years, while energy consumption will increase by some 89 percent over the same period. Global Trends 2025 predicts future energy demand will be met with expanding fossil fuel production, while the percentage of demand met by alternative fuels will remain largely steady. This suggests that developing countries will likely continue to rely on lower-cost fossil fuels for their energy needs.

The International Energy Agency in its "external page2009 World Energy Outlook Factsheetcall_made" anticipates that world energy production will be able to meet demand, but it confirms: "The continuation of current trends would have dire consequences for climate change." The same report frankly states: "Price volatility will continue, but the days of cheap energy are over." It is clear that high energy prices will have an impact on the cost of food production and transport, but how it will affect the availability of food is not. An additional factor that will boost demand for agricultural crops is expanding demand for biofuel production, which the OECD-FAO report anticipates "will create additional demand for wheat, coarse grains, vegetable oils and sugar."

Managing demand: Demographics and development

This widening gap between rising demand and diminishing supply highlights another important challenge facing the 'post-surplus' world: managing the drivers of consumption. external pageLong-term forecastscall_made and other post-surplus scenarios of global scarcity assume consumption (individual and industrial) will continue at or (more likely) increase beyond current levels, as developing countries grow richer and demand in these areas rise.

…with increasing affluence and an expanding middle class, food consumption in these countries should become less responsive to price and income changes, as is currently the case in OECD countries. This implies that larger changes in price and incomes will be required for consumption to adjust to any unforeseen shocks.

Economic development

The OECD external pageexpectscall_made that developing and emerging economies will account for almost 60 percent of economic growth in 2030, which means these countries will have a greater impact on global demand for natural resources and global trade and consumption patterns. The OECD-FAO report argues that developing country demand for these goods will sustain global demand and will shape the markets.

Demographics

The drivers of demand are people. According to the UN Department of Economic and Social Affairs, Population Division report, " external pageWorld Population to 2300call_made", the global population will reach eight billion people by 2025, while approximately 60 percent of world's population will be living in cities by 2030, according to the report "external pageWater in a Changing Worldcall_made".

"Global Trends 2025" forecasts that 50 countries will experience a population increase by more than one-third, with an additional eight megacities to join the current tally of 19. Massive shifts in population proportions along demographic lines (such as youth or elderly population bulges) and due to migration are expected to give rise to political competition, conflict and change (especially along religious and ethnic divisions) in industrial countries with low fertility rates.

Managing competition and conflicts

These demographic pressures coupled with rising competition for diminishing resources have the potential to exacerbate already complicated problems. Indeed, the second major challenge facing the world as resource scarcity deepens is the management of competition and conflict.

At present, the International Crisis Group is tracking over 70 open conflicts involving the deadly use of force around the world. But there are an innumerable numbers of small intra- and inter-state conflicts that will shape and be shaped by global resource scarcities, and especially by local economic imbalances - a real risk to regional stability.

The tools and techniques employed in the field of conflict management are as multifaceted as the problems they are used to resolve, suited to the needs and environment of multi-causal conflicts. While these are beyond the scope of this analysis, it is clear that conflict management and prevention will become even more the management of complexity.

This is most reflected in the mandates of international agencies focusing on peace making and conflict resolution. For instance, the UN Public Administration Program has a project, Capacity Building in Conflict Management that focuses entirely on transferring knowledge:

To impart awareness and skills to government officials and their civil society counterparts, to assist them to anticipate and respond to crises, to work effectively in conflict-prone environments and to increase their ability to defuse tension and address the inequalities that may lead to violence.

In the future, security will be much more shaped by concepts such as collaboration, cooperation and prevention, approaches that are much better suited to unwinding complex conflicts. Many nations, including the UK, US, China, France, Japan and New Zealand, address security in these terms in their annual security and defense white papers - so much so that these are becoming significant principles of national policy.

Managing sustainability: From knowledge to action

The third challenge in the post-surplus future will be to coordinate efforts to shift human activities (as far as possible) closer to sustainability (especially consumption and production.)

…human activity is currently unsustainable in that it requires more than the total of all such productive land and sea area - i.e., more than one planet - to support it. On current trends, by 2040 it would require two planets.

There is certainly the argument that market forces alone will be sufficient to modulate consumption and production. But as the era of global surplus begins to draw to a close, so too is the paradigm of blind trust in market forces and market actors. Changing the attitudes that shape demand and the policies that shape production will require a tremendous mobilization of knowledge and policy coordination.

Limiting destruction and waste

Sustainable approaches to consumption will play a crucial role in limiting the destruction that occurs in present global consumption patterns. Whether the waste and destruction are at the point of harvest/collection, or in the production process or after the point of sale, how we use natural resources during the entire life cycle of a product is problematic.

• 38 million tons of bycatch (unwanted and untargeted marine life) are caught, injured or killed at sea every year. ( external pageWWFcall_made)

• 12-15 million hectares of forests are lost annually by deforestation. ( external pageWWFcall_made)

• 3.5 million tons of garbage float in the northern Pacific Ocean.

• Mining can result in erosion and contamination of soil, ground and surface water and ultimately a loss of biodiversity.

The UN Commission on Sustainable Development (CSD) has begun a two-year cycle during which it will examine the sustainable use and management of resources. The CSD will issue policy recommendations in 2011. The UN Environmental Program and many other agencies and numerous NGOs support the development and implementation of initiatives and policies for efficient and responsible consumption. Trends can only be turned around when sustainability becomes part of the mindset of consumers, policies of governments and the business practices of the private sector..