Friday, 19 November 2010

A Prelude To Scarcity

In recent days, there has been quite a lot of interest in the issue of long term scarcities. This is an area upon which we have been working for over a year now – longer if we include the work on the Post-Scarcity World – and it seems to be an area that is coming into fashion. The argument for scarcity is well rehearsed. In 2000 there were 6 billion souls on the planet. By 2050 the mid-estimate of the UN is that there will be 9 billion people. Balanced against this increase in potential demand for resources is the view that we are coming to the point of peak production for many resources, thus potentially restricting their supply. The result of this clash of rising demand against falling supply will be an ‘Age Of Scarcity’.

Of course, the transition to the Age Of Scarcity is not likely to be discontinuous. We are likely to drift into a position of scarcity over a number of years, with, every now and then, a prelude of what is to come. We would argue that this is what is happening with food prices. After a long period of falling food prices in real terms, from 1980 to about 2002, food prices appear to have started to rise on a long term trend. This trend, underpinned by growing demand in the emerging economies and by modest improvements in crop yields, looks set to continue for some time to come.

Every now and then, a combination of natural disasters, the impact of climate change, the impact of trade nationalism, and so on, serves to tighten the markets a bit. It happened in 2008, and is again happening in 2010. To this extent, we are witnessing over a small period of time what may well happen over a longer time frame. We are witnessing a prelude to scarcity.

© The European Futures Observatory 2010

The Economist food-price index: Malthusian mouthfuls | The Economist

No comments: