New scientific models supported by the British government’s Foreign Office show that if we don’t change course, in less than three decades industrial civilisation will essentially collapse due to catastrophic food shortages, triggered by a combination of climate change, water scarcity, energy crisis, and political instability.
Before you panic, the good news is that the scientists behind the model don’t believe it’s predictive. The model does not account for the reality that people will react to escalating crises by changing behavior and policies.
But even so, it’s a sobering wake-up call, which shows that business-as-usual guarantees the end-of-the-world-as-we-know-it: our current way of life is not sustainable.
The new models are being developed at Anglia Ruskin University’s Global Sustainability Institute (GSI), through a project called the ‘Global Resource Observatory’ (GRO).
The GRO is chiefly funded by the Dawe Charitable Trust, but its partners include the British government’s Foreign & Commonwealth Office (FCO); British specialist insurance market, Lloyds of London; the Aldersgate Group, the environment coalition of leaders from business, politics and civil society; the Institute and Faculty of Actuaries; Africa Development Bank, Asian Development Bank, and the University of Wisconsin.
This week, Lloyds released a report for the insurance industry assessing the risk of a near-term “acute disruption to the global food supply.” Research for the project was led by Anglia Ruskin University’s GSI, and based on its GRO modelling initiative.
The report explores the scenario of a near-term global food supply disruption, considered plausible on the basis of past events, especially in relation to future climate trends. The global food system, the authors find, is “under chronic pressure to meet an ever-rising demand, and its vulnerability to acute disruptions is compounded by factors such as climate change, water stress, ongoing globalisation and heightening political instability.”
Three steps from crisis
Lloyd’s scenario analysis shows that food production across the planet could be significantly undermined due to a combination of just three catastrophic weather events, leading to shortfalls in the production of staple crops, and ensuing price spikes.
In the scenario, which is “set in the near future,” wheat, maize and soybean prices “increase to quadruple the levels seen around 2000,” while rice prices increase by 500%. This leads to rocketing stock prices for agricultural commodities, agricultural chemicals and agriculture engineering supply chains:
“Food riots break out in urban areas across the Middle East, North Africa and Latin America. The euro weakens and the main European stock markets lose 10% of their value; US stock markets follow and lose 5% of their value.”
The scenario analysis demonstrates that a key outcome of any such systemic shock to the global food supply — apart from “negative humanitarian consequences and major financial losses worldwide” — would be geopolitical mayhem as well as escalating terrorism and civil unrest.
The purpose of exploring such scenarios is to prepare insurers for possibilities that are now more likely than previously assumed. The Lloyd’s report points out:
“What is striking about the scenario is that the probability of occurrence is estimated as significantly higher than the benchmark return period of 1:200 years applied for assessing insurers’ ability to pay claims against extreme events.”
That leading insurance companies are now attempting to factor in potential losses from such crises is a major step forward in pushing the financial sector to recognise the dark-side of the current system of fossil fuel dependence.
The report concludes:
“A global production shock of the kind set out in this scenario would be expected to generate major economic and political impacts that could affect clients across a very wide spectrum of insurance classes.”
It would have “major consequences for companies’ investment income,” with the potential to “generate losses that span many years.” It would also result in political instabilities that take “decades to resolve” while imposing “greater restrictions on international business.”
Governments want answers
The scenario was developed for Lloyds by the Anglia Ruskin University team with the British Foreign Office’s UK/US Task Force on Resilience of the Global Food Supply Chain to Extreme Events.
The Foreign Office’s food resilience Task Force began to come together late last year. An FCO document from February 2015 for a Task Force workshop throws light on its rationale, direction, and participants.
“The taskforce is looking at plausible worst case scenarios of disruption to the global agri-food system, caused by extreme weather events,” the document explains. Taskforce projects aim to “improve understanding of how changing extreme weather events (severity, type, frequency, geographical impact) may impact on global food security” and to “identify how market and policy responses may exacerbate or ameliorate these effects.”
Of particular concern to the FCO’s taskforce is to determine “how large shocks in agricultural production could occur (e.g. floods, droughts, wind storms),” how these would translate into “crop reductions,” and “how society responds to high food prices or limited local availability.”
Although coordinated by the FCO, other British government-backed programmes are involved, chiefly, the Global Food Security Programme and UK Science & Innovation Network, together representing the Department of Environment, Food and Rural Affairs (DEFRA); the Department of Health; the Department for International Development (DFID); the Government Office for Science; the Department for Business, Innovation and Skills; and the Scottish and Welsh governments.
On the US side, government involvement was limited to the Center for Integrated Modeling of Sustainable Agriculture and Nutrition Security (CIMSANS), which is supported by the US State Department, and USAID’s Famine Early Warning Systems Network.
Another participant was a senior researcher from the Consultative Group for International Agricultural Research (CGIAR), whose members include many leading international institutions.