Global crises in a resource-constrained, multipolar world Hello. My name is John Humphrey. I am the team leader of the globalisation team. Welcome to IDS A particular thanks to Naomi for giving me the opportunity to interact with you. Sorry about the title. I think it was produced by a committee. one of the reasons that I am here is that when we were thinking about the financial crisis and developing countries in late 2008 and early 2009, we quickly began to realise that the crises facing people in some developing countries were very different to those facing the OECD economies. This led us to think about crises of financial crisis, including food and climate change. I am going to say a little bit about this, but more about the long-term than the short-term. John Humphrey Globalisation Team

Looming, long-term crises New powers and multipolarity Equity Outline Looming, long-term crises New powers and multipolarity Equity Timeframes Governance I am going to talk about… Looming, long-term crises New powers and multipolarity Equity Timeframes Governance Not too much then.

But food security is only part of a ‘Perfect Storm’ of global events Increasing population Increasing levels of urbanisation The rightful goal to alleviate poverty Climate Change Increased demand 50% by 2030 (IEA) Energy Water 30% by 2030 (IFPRI) Food 50% by 2030 (FAO) Climate Change First, looming long-term crises. This is the John Beddington slide. he has presented it often enough for many of you to be familiar with it. things are bad. the main points to take from the slide are: The pressures are genuinely global. All countries will suffer in varying degrees if population growth and economic growth come up against limits of the natural resource economy. In effect, Beddington is pointing to the problem of whether or not we can continue to treat a finite resources as though they were infinite. Interestingly, this could be considered a radical discourse, but it can also be seen as a reactionary discourse, and so by some people in IDS. these resource pressures interact with climate change and greenhouse gas emissions, as you all know. Hence climate change in the middle. There is a time issue. These big changes do not necessarily impact in the next 5-10 years. For example, the big impacts of climate change adaptation in Africa are likely to emerge 20-30 years down the line. BUT, we do need to act now. The way 20-30 years, then another 30 years of climate change after thatwill be locked in. This creates two issues: how do we bring the future into the present? Can we link immediate crises with long-term trends. what are the dangers in doing this. There is an equity issue. How our rights to remaining, possibly dwindling, resources distributed? I will come back to this. Needs governance. What sort? I will come back to this Beddington is not the only person to suggest that there is a looming crisis. John Beddington Chief Scientific Advisor UK Government

this report from Brookings and, I think, New York University friends the crises in much the same way adding global security crises to the population/resources/climate change issues. I’ll come back to these guys. Both the governance issues and the equity issues have become much more complex as a result of multipolarity. Which means the decline of US economy and the rise of new powers, particularly China and India. Or if you want, the BRICs but I don’t want a discussion on whether this category make sense.

GDP Projections, 2050 this is the famous Goldman Sachs BRICs projection. click if we project forward China becomes the largest economy in the world, followed by the United States and India. the data is pretty startling, and of course, it is just meant to startle. Projections are unreliable, particularly over a period of almost 50 years. The rest are nowhere. Japan trails in fourth place with an economy about 1/7th of the size of China. Germany is even further behind, with an economy well under a 10th the size of China and less than 1/7 the size of India. What the two countries have in common is their large populations and rapid growth. You do not have to wait until 2050. From 1990 to 2005,China and India accounted for 37% of global growth measured at purchasing power parity. But, equally, China and India are very different. China’s economy is about three times as big as India’s, and it is much more outward oriented. China’s was more than six times as big as India’s in 2004 and was growing more rapidly. FDI flows into China were 10 times the level seen in India in 2004, although FDI has increased substantially in India in 2006-2007. But, why stop at these two countries? What about Japan? Why ignore the biggest economy in Asia? It’s a good question. China, for all its rapid growth, is not actually that exceptional in terms of growth experiences. Look at this graph. CLICK Source: Goldman Sachs, Dreaming With BRICs: The Path to 2050 humphrey_genevaApr08

USA Other OECD You do not have to wait until 2050. From 1990 to 2005,China and India accounted for 37% of global growth measured at purchasing power parity. China alone accounted for 28% of incremental global GDP between 1990 and 2005, and India and the rest of developing Asia contribute a further 17% to global growth. The black area, “other OECD”, means a good part of Europe, Canada, Turkey, Australia and New Zealand. The growth of these was greater than Asia excluding China India. China Rest of Dev Asia India Source: David Dollar, presentation to GDN, Beijing,Jan 2007

Strong long-term trend in terms of world trade. Obviously, China is a substantial part of this. it exports more goods than Brazil, India, Russia and South Africa put together.

Financial crisis Accelerates convergence continuing growth in rising powers possible stagnation in Europe Heightens the need for global governance to be more inclusive – G20 not G8 Undermines West’s claim for economic superiority Increases confidence and assertiveness of rising powers

New powers create problems, two sorts transition. instability more actors, more complexity. But I think the equity issue is a bigger problem. the crises I’ve mentioned relate to scarce resources and hence access, rights , equity, justice – for the past and the present. and this is particularly problematic for the rising powers, because they are still poor, but becoming more central to the global economy and global politics. nowhere clearer than in CC

Total GHG Emissions, 2000, MtCO2 equivalent Contradiction of poor but powerful. China. The responsibility for climate change. Seen in terms of absolute national levels of GHG emissions, China 2nd in 2000 – possibly 1st now. India fifth. humphrey_genevaApr08

Incremental GHG emissions 2004-30 (% of global total) If we project forward even more startling. China projected to be resp. for 40% of increase in GHG emissions 2004-30, India 10%. No wonder pressure on them. humphrey_genevaApr08

GHG Emissions, 2000, per capita But in per capita terms, very different picture. From this perspective, they are still low emitters. And this is the contradiction. Who should bear the burden of responding to the challenge of climate change by reducing emissions? Clearly, the country’s most responsible, which are also the richer countries — both currently and historically. BUT China the world’s largest emitter of greenhouse gases Expected to be responsible for larger share of increased emissions in next 25 years Low per capita emissions But even poor countries expect China to take some responsibility: seen in Bali. More responsibility than poor and slow-growing countries. So we need to build new relationships that reflect the changing power relations between the OECD countries and the rising powers And address their contradictory position as poor but powerful. humphrey_genevaApr08

Cumulative CO2 Emissions, 1900-2005 Cumulatively, though, very different. 1900 onwards. And if you do this per capita, even more startling. Not surprising that the Chinese like cumulative CO2 emissions And if we add to this, the fact that China and India are still relatively poor, and inevitably prioritise growth and poverty reduction, then the equation becomes even more complex. We might explain the rush for oil in Africa by China, and latterly India as well, also in terms of being late starters in the global oil industry and rushing to catch up.

How food and water are driving a 21st-century African land grab The Observer, Sunday 7 March 2010 How food and water are driving a 21st-century African land grab An Observer investigation reveals how rich countries faced by a global food shortage now farm an area double the size of the UK to guarantee supplies for their citizens A woman tends vegetables at a giant Saudi-financed farm in Ethiopia. ….Nestling below an escarpment of the Rift Valley, the development is far from finished, but the plastic and steel structure already stretches over 20 hectares – the size of 20 football pitches. And, currently, land grabs are the hot issue. but, read the IIED, IFAD, FAO report before getting too excited.

Time Climate or weather? Long term stresses in relation to acute shocks How much are current volatilities in food and energy prices indicators of long-term trends? 2030 versus today Bringing the future into the present Moving on, let me briefly raised the question of time. I can summarise this in terms of climate versus weather. We have Long term stresses and acute shocks Can we link immediate crises with long-term trends. we have increasing volatility of food and energy prices recently. Is there any connection with the John Beddington scenario? Tempting to make the link, particularly because of climate change. We need mitigation now, so it is tempting to link current problems with long-term trends. For example, hurricanes, glaciers. A more general way of thinking about this is how to bring the future into the present. In all these crises, future misery is an externality. This means changing the calculus of action now so that changes needed for the future happen in time. so, we get to the question of governance. Global problems, multipolarity, equity issues, time horizons. I could just stop here. Let’s face it, if we wanted to achieve global solutions, we wouldn’t start from where we are. Neither the Doha Round nor the Copenhagen outcome are very encouraging. both ran up against the issues of equity and multipolarity. and personally, I don’t think giving up on global processes and trying to reconstruct the world from the bottom up is coming to be enough.

But let me go back to this paper, because it does offer some interesting ideas

Governance (1) The Beddington strategy defragment – in multiple crises focus on risk and uncertainty place value on the future – foresight Governance. we can rule out global government, so we have to work with the rather messy intergovernmental, multilevel institutions we currently have. The way they operate is changing because of the emergence of new powers and the decline of the US as a unipolar power. We have already moved into a multipolar world. What do the authors of confronting these long global crisis of globalisation say? Part of it is the Beddington strategy defragment – there are multiple crises focus on risk and uncertainty – still have to bring it into the present. I was at a foresight meeting. Asda Time horizon two years place value on the future – foresight process

Governance (2) Institutions increase “bandwidth” – thicker relations to build trust and understanding (repeat transactions) aggregate actors – not 180 countries Regions? Types? Caucuses? more authoritative knowledge – as in IPCC strengthen G20 a Secretariat, continuity of chairing, more advanced preparation promote organisation of other states, rather than obstruct – cede power to make organisations work focus on fairness rather than power think about penalties for non-cooperators But also some practical institutional reforms. Probably informed by a US perspective increase “bandwidth” – thicker relations to build trust and understanding (repeat transactions). In practice? aggregate actors – not 180 countries. Regions? Types? Caucuses? Also work across groupings. EU needs to network more because much weaker. Internally and externally. more authoritative knowledge – as in IPCC strengthen G20 a Secretariat, continuity of chairing, more advanced preparation promote organisation of other states, rather than obstruct – cede power to make organisations work. A lesson for both the US and the EU. focus on fairness rather than power think about penalties for non-cooperators how much of this relates to the current crisis food, finance, energy and volatility. Unstable interconnectedness.

Obviously, China is a substantial part of this. it exports more goods than Brazil, India, Russia and South Africa put together.