August 24, 2010

MDGs for the Already Developed World

Christine and Will are spending this week in Hamburg, Germany, where they will be leading a game simulation based on international climate change negotiations coming up this December in Cancun.  In their absence, welcome to a week of me on the blog!  Since it’s my very last week here at CNAS, I hope to share some of the things that I’ve learned in my time here as well as the typical news and events fare.  Hope you enjoy!

mdgs.jpgLast weekend, New York Times blogger Andrew Revkin posed an intriguing question on his Dot Earth blog: do the top billion need new goals?  He was referring to a new version of the Millennium Development Goals (MDGs), a set of 8 comprehensive goals to achieve sustainable development for the poorest people in the world (often referred to as the “bottom billion” after Paul Collier’s book title),  including benchmark targets for income, hunger, maternal and child health, education, gender inequality and environmental degradation.  But goals for the already developed world would look at the opposite end of the spectrum: instead of finding ways to speed up development, these goals would identify factors that could slow growth and reverse prosperity in the rich countries in the future.

Throughout my all-too-short time here working with the Natural Security program, I’ve learned a great deal about energy policy in the United States, alternative fuel resources and the potential effects of climate change, some of it expected and some quite shocking.  But everything I’ve learned points me towards a conclusion that I (along with many others) had already reached- that the United States’ addiction to fossil fuels could very quickly prove an impediment to economic development, and sooner than many people think.

Putting aside the environmental effects of our reliance on fossil fuels- from extraction to the release of greenhouse gas emissions- the world is very quickly running out of accessible fossil fuels, especially petroleum.  In the course of some research for the upcoming report on DOD’s fuel use I came across the concept of reserve-to-production ratios.  While there are several different statistics that measure oil and gas reserves, the r/p ratio really tells us the most information about how much petroleum is left in the world, since it measures the total amount of proved reserves available in each country divided by the total production in that country per year, leaving you with the number of years that reserves are expected to last at the current production rates. 

The results are frightening.  According to the 2010 BP Statistical Review of World Energy, measured by R/P ratio, the United States will run out of petroleum reserves in less than 11 years-by 2021.  Mexico and Canada, the top two sources of petroleum for the United States, will stop producing oil in about 11 and 28 years respectively.   The European Union as a whole will most likely run out in about 8 years.  In fact, the only countries expected to still be producing petroleum in 75 years are Venezuela, Iran, Iraq, Kuwait and the United Arab Emirates. 

This is a bad news story for two reasons.  First, the world’s total R/P ratio is about 45 years, meaning that most sources of petroleum are going to run out quite soon.  Second, the countries that will still be producing petroleum in the long term, notably Venezuela and Iran, are not exactly close friends of the United States and certainly not reliable trading partners.  Taken in combination, these statistics imply that the United States and the rest of the developed world will not be able to rely on petroleum to fuel economic growth, and that without a coordinated strategic shift to alternative sources of fuel, it is likely that the developed world could experience a decline in economic growth in the near future.

Going back to the environmental effects: Thomas Homer-Dixon wrote in an op-ed in The New York Times yesterday that national and international policy makers need to develop a set of contingency plans- a “Plan Z”- to deal with major climate change shocks in the near-future.  He posits the possibility of a major climate-related disruption like a major crop failure, or a drought that leads to major cities in the American Southeast or Southwest running out of water, saying “both regions have large urban populations pushing against upper limits of water supply. The news clips of cars streaming out of Atlanta or Phoenix might finally push our leaders to do something serious about climate change.”  It’s not hard to see how these kinds of effects could have a huge negative impact on economic development in the already developed world.

It’s been a very long time since the developed world has had to worry about making positive economic progress, at least in comparison to the bottom billion, who survive on an income of less than a dollar a day.  But if the developed world is not able to meet a certain set of goals relating to consumption, the environment and technology among others, economic development may once again become an important concern.

Image: Australian Business Volunteers