Introduction and Overview
Issues of resource scarcity are rising rapidly up the political agenda – in both developed and developing countries, and at multilateral institutions from the UN to the G20. At the same time, recognition is also growing of the centrality of these issues to development, given the higher vulnerability of poor people and their greater reliance on natural assets. For the most part, political attention on resource scarcity issues has focused on the two areas of supply side measures: increasing the availability of food, water, energy etc. through greater investment, technological innovation etc, and reducing vulnerability to the shocks and stresses that resource scarcity can drive, for example through emergency food stocks and crisis management systems.
However, given that demand for key resources may well outstrip supply, a third key theme – which has so far received less political attention – is the need to confront the distributional issues that arise in a world of environmental limits. As total global consumption levels start to hit sustainable (or in some cases absolute) limits for resources like land, water, food, oil and carbon space, the need to advocate for “fair shares” of these resources for poor people and poor countries will become increasingly central to international development.
Mapping out this new development agenda will involve unpacking some highly political questions. What definition of “fairness” is most appropriate – just ensuring that poor people’s basic needs are met, or a more egalitarian approach that tries to reduce inequality in access to resources? Does it make sense to think about equity of access to a particular resource (carbon permits, say), or is it more helpful to think about overall wealth or income distribution, and the entitlement that this carries with it to resources of all kinds? Which aspects of the agenda should campaigners focus on most?
This discussion paper aims to contribute to this evolving debate by providing a short overview of some of the main issues involved, together with some tentative policy recommendations and areas for further work. Part 1 begins by setting out some examples of access and equity issues that arise in the context of scarce resources, both within countries and internationally. Part 2 then sets out a discussion of some of the underlying issues involved, including different ideas of fairness and some of the potential dilemmas involved. Part 3 explores some of the concrete policy implications of this agenda and sets out ten tentative policy recommendations and suggestions for further work:
Invest in improving the data. Any agenda of „fair shares” in a world of limits will depend on accurate data. But current surveillance systems on resource scarcity suffer from major gaps, and are poorly integrated across both issues and levels of governance.
Recognize that scarcity isn’t just relevant to specialists in environment, climate and rural livelihoods. On the contrary, resource scarcity will become increasingly central to governance, economics, social development and conflict advisers, and should be incorporated into training and professional development across these areas.
Understand how scarcity shapes politics in poor countries. Rather than seeing scarcity as a stand-alone issue, donors and NGOs need to understand how it fits in to the larger political economy context and relates to urban / rural tensions, political parties, spending decisions, civil society dynamics, the politics of ethnic groups and so on.
Focus on access to justice. Even where legal frameworks are in place to ensure a certain level of resource access, poor people may find their rights abrogated – for example through forced displacement from land – as scarcity increases. Focusing on access to justice will therefore be critical for governance specialists.
Be clear that this isn’t just an in-country agenda. It is at international level where there is most to be done, given that the key drivers of resource scarcity are global – so donors should scale up work on areas like policy coherence for development, international institutional reform and sustainable consumption in OECD countries.
Start developing policy options now, before the policy space for them opens up. As impacts of scarcity and climate change increase in frequency and severity, political space will open up – often after shocks, for a limited time. This places a premium on having ideas “on the shelf,” that can be deployed rapidly when opportunities open up.
Focus on basic needs to start with. Much support for development already depends on the idea that all people have a right to the basic needs of life. The fact that resource scarcity imperils these basic needs can create a bridgehead narrative that opens up space for talking about more difficult aspects of fair shares, but start building up the broader ‘fair shares’ narrative too. Donors and NGOs should do everything they can to deepen awareness that individual consumption choices have global impacts, and that taking equity seriously is a prerequisite for sustainable management of shared resources – not just a “left wing” agenda.
Focus on poor people, not just poor countries. A focus on resource scarcity necessarily implies looking at inequality within countries – partly because poor people are most vulnerable to resource scarcity and environmental shocks, but also because scarcity will create new opportunities for elite rent-seeking, corruption and exploitation.
Don’t jump straight to the limits to growth question. Debate is starting to open up on whether limits apply just to certain resources, or to growth itself. Even if the latter is true (which it could be), it will take time for this to become clear. While campaigners should not try to duck the question of whether there are limits to growth, neither should they risk polarizing debate by taking too definitive or didactic a tone at the outset. Instead, they should play a long game: suggest that there is a genuine debate to be had about limits to growth, and that the jury is still out, but above all underline that it is already clear that there are limits to the supply/availability of crucial resources - and that policy needs to face up to this, and in particular the fair shares issues that are unavoidably involved.
Resource Scarcity, Fair Shares, and Development
There is an ongoing debate on the link between resource scarcity and international development. This paper written by Alex Evans from the Centre on International Cooperation (New York University) in cooperation with Oxfam UK aims to contribute on the dialogue on this issue.
Into a world of scarcity
In recent years, issues of resource scarcity and environmental limits have risen up the global agenda. Demand for resources of all kinds is rising sharply due to both a growing population and rising affluence in emerging economies. But at the time, supply growth has sometimes struggled to keep pace, and there are concerns that these tensions could intensify. For example:
Demand for food is projected to rise by 50% by 2030. However, the world consumed more food than it produced in 7 of the 8 years between 2000 and 2008, rates of productivity growth driven by the “Green Revolution“ are running out of steam, and the world is having to make up for a long period of under-investment in agriculture.
The amount of arable land per capita halved from 1960 to 2007, from 0.39 to 0.21 hectares, but demand for it is increasing from multiple sources including food, feed, fibre (paper, timber etc.), bio-fuels, carbon sequestration, conservation and cities.
Demand for water is likely to rise by 25% by 2025, but is already beyond sustainable use levels in many areas of the world, leading to depletion of both ground and surface water resources. Climate change will further exacerbate the problem. By 2025 up to two thirds of the world people are likely to live in water-stressed conditions.
Demand for oil is projected to rise by 40% by 2030, but supply is already hampered by significant under-investment in new production sources and the increasing difficulty of reaching remaining reserves, leading the International Energy Agency to warn of the risk of a major supply crunch.
Despite countries? continuing unwillingness to define a safe global carbon budget in the UNFCCC, the amount of carbon space for any stabilization level continues to shrink rapidly as emissions continue to grow, meaning that carbon budgets will have to fall even more steeply in the future.
And scarcity concerns have also been mooted in many other contexts, including rare earths and metals that are essential for many clean technologies, uranium (essential for nuclear power generation), and access to ecosystem services, biodiversity and so on.
As supply and demand balances have tightened, volatility has increased. As a result, so has the political salience of resource security, climate change and (perhaps above all) commodity prices.
Food and commodities feature prominently on the 2011 G20 agenda, as they did at the 2008
The 2011 World Economic Forum has launched a major new programme of work on resource scarcity. While the 2009 Copenhagen summit achieved limited progress on climate change, it marked a new level of engagement on the issue by heads of government.
Private sector engagement in resource scarcity and climate change has moved well beyond the weak voluntarism of “corporate social responsibility.”
So far, the policy agenda on resource scarcity has focused primarily on two key areas – increasing the supply/availability of resources, and improving management of shocks and volatility.
This overall agenda – of seeking to counter scarcity by increasing supply and then dealing with short term shocks and stresses through building more effective buffers at both international and country level – makes sense. But it also leaves open a key question: what if it proves impossible to increase the supply or availability of key resources enough to meet spiraling demand?
Such an imbalance is a very real possibility. Policymakers are currently assuming that massive breakthroughs in technology and resource efficiency will be made, and then rolled out on a global scale, within timescales of historically unprecedented rapidity. This is not to say that the kind of intense scarcity likely to be seen in the next few years or decades will be a permanent condition – on the contrary, markets, institutions and communities will adapt to changing circumstances as they always do. But this process of adaptation will come with time lags attached, given perverse subsidies for inefficient resource use, path dependency, vested interests, and political impediments to action and so on. In the meantime, levels of risk will be substantially heightened.
To an economist, the answer to what happens during such an imbalance of supply and demand would simply be that prices would increase and choke off demand. This dynamic can arguably be seen when high oil prices act as a brake on economic growth, leading to demand falling and oil prices easing once more. Some economists have argued that this is part of what happened in 2008 when oil prices collapsed fell after touching $147 a barrel. But even if this is true, there is still a difference between short term price declines within a longer term outlook of inflation combined with higher volatility on one hand, and genuine “demand destruction” on the other.
At present, it is hard to see many signs of genuine economic transformation away from oil.
Other resources, such as food, water, land and carbon space, are much harder to substitute for – meaning that while demand destruction is still needed, the question arises of whose demand must fall.
Fair Shares in a World of Limits
In other words, a third aspect to the policy agenda - which policymakers have been slower to embrace - comes into play. This is about the distributional or equity issues that inevitably arise when demand exceeds supply, not just during a short term shock, but over a longer term structural transition: the question of “fair shares” in a world of limits. This third cluster of issues is particularly important in the international development context, as the following examples show.
On food, how much is produced is only part of the story: as important is who enjoys access to the food that is produced. (As Amartya Sen famously put it, “starvation is the characteristic of some people not having enough to eat. It is not the characteristic of there not being enough to eat.” Poor people are especially exposed to food price volatility and variability, frequently spending three quarters of household income on food. While access to food is partly about what happens in countries, it also has crucial global dimensions. Two of the main sources of additional demand for food are global: a larger and more affluent global middle class? shifting to western diets, and diversion of food crops to bio-fuels (40% of this year’s US corn crop will be used for ethanol).xiii Global factors such as climate change, high input prices and competition for land will also affect supply growth. Scaling up social protection may not be a sufficient policy response if these overarching supply and demand tensions mean that poor people or countries are priced out of the market.
On energy, too, issues of access are critical. Poor countries have been heavily impacted by high oil prices: a 2007 report from the IEA found that in 13-non-oil producing states in Africa (including Ethiopia, South Africa and Ghana) increases in the cost of oil from 2004 to 2007 came to more than they had received in aid and debt relief over the same period.
While mechanisms such as the IMF Standby Credit Facility exist to support countries facing balance of payments difficulties, the explicit assumption is that such difficulties will be short term. But if high oil prices represent a “new normal” - because of under-investment, peak oil or simply because demand grows faster than supply -then poor countries risk being priced out of the market unless longer-term mechanisms are in place to ensure their access.
While land is not an internationally traded commodity, intense distributional issues still apply. Even when poor people do enjoy access to land, they often lack formal title to it, leaving them exposed to displacement. This brings vulnerability to the global trend of long term land access deals, which are already estimated to account for 79.9 million hectares of land, primarily in Africa, and disproportionately on community lands. Many of these deals have disadvantaged poor people by displacing them from land without their participation or consent, without creating employment and without due consideration given to food security impacts. A similar problem is visible in fisheries, where for example EU fishing fleets have bought up the fishing rights of some African coastal states, with financial benefits accruing to political elites rather than fishing communities (an “offshore land grab”).
On water, as already noted, “land grabs“ are often also water grabs in that water rights come with title to the land, enabling the leaseholder to export the water used to grow crops produced on it (virtual water). Intense equity issues also arise in any discussion about pricing water, or allocating water rights. Equally, if water is not priced or allocated, then this can also lead to inequitable outcomes, particularly if overall use rates are unsustainable
As the poor are often the first to lose out in this situation (e.g. through exposure to price gouging by water sellers, or being unable to afford water drilling technology).
On climate change, UNFCCC Parties have long been unwilling to discuss how any future global carbon budget would be shared out. This makes it effectively impossible to start talking about a global policy framework for stabilizing greenhouse gas concentrations, and also impacts developing countries in that carbon space is still being used up whether or not a carbon budget has been defined, so entitlements that would belong to developing countries in an equitable and comprehensive framework are instead being used for free by high emitters.
There is also a broader issue of access to natural resources and environmental goods at the aggregate level. This can be illustrated by ecological foot printing, which quantifies demand on ecosystems by measuring the total productive land and sea needed to produce and regenerate the resources that an individual or population consumes. The latest LPI finds that current global consumption overshoots planetary capacity by 1.5 times (i.e. it would take “1.5 planets” to sustain today’s economy).Similarly, the Stockholm Environment Institute has identified nine key planetary boundaries - climate change, stratospheric ozone, land use change, freshwater use, biological diversity, ocean acidification, nitrogen and phosphorus inputs to the biosphere and oceans, aerosol loading and chemical pollution. It argues that three (climate, biodiversity and biogeochemical flows) have been crossed while others are nearing their tipping points.
But these issues of boundaries and sustainable limits are also inherently linked to issues of who gets to consume what within those limits. At present, high income countries? footprint is three times that of middle income countries, and five times that of low income countries.
If total consumption is to fit within sustainable levels and low income countries are to grow their economies and improve their material standard of living - both precursors for sustainable development - then major issues of fairness arise, above all the need for developed countries drastically to reduce their footprints so as to provide a “fair share”? of limited environmental space for developing countries.
Alula Berhe Kidani is on the staff of Sudan Vision, and independent Sudanese daily in English Language that offers local, African, and world coverage including breaking news, business, sports, editorials, commentaries, and feature stories.