What we eat

The other day I had a conversation with a friend that came to a conclusion. We decided that the environmental issues of biodiversity and climate change would be transient and replaced in the public consciousness by food security and the consequences of oil at $200 a barrel.

My point, conceded, was that food and the price of oil will stick until we find viable, safe and long-term alternatives to our current food production systems and energy sources.

We talked over an obvious and probably necessary option to improve food security, which is to eat less meat.

Animal protein requires many more times the space and water to produce than plant protein thanks to a simple and inevitable consequence of thermodynamics. Animals convert plants to protein at roughly 10% efficiency however good the farmer is at his husbandry. When both space and water become scarce it makes sense to eat the plant that is equally nutritious to us than. It would be easy enough to increase the proportion of plant protein in our diets.

Despite the logic being so obvious, my knee-jerk response to the suggestion that we could alter our diets and even grow some of these fruit and vegetables at or closer to home was:

“In whose lifetime?”

Maybe it was the cynic in me, that nasty resident who has become more cranky and vocal as the years pass, or knowledge of what has gone before that made me so negative.

Quite rightly my friend did not concede.

The exchange reminded me of two articles I read a year ago that did give me some justification.

The first was on the flip side of the food security argument saying that some foods such a meat and fish should be eaten in moderation because there is an environmental cost to their consumption.

The second described the outrage people would feel at being told they must go against all the advice of the nutritionists and eat less fish and lean meat. These foods are good for our health. The article then went on to claim that the environment is free and bountiful so what is all the fuss about.

The ‘but it’s healthy’ argument will be strong and will kick back against rising prices when meat and fish become scarce. It is the kind of entitlement logic we have come to expect in modern societies.

In the end though we will learn some tasty preparation of vegetables, eat meat only occasionally, and curb our sweet tooth because most of us will not be able to afford anything else. And, of course, we will also become healthier.

It has already happened in Cuba where the drastic reduction in oil imports when the Soviet Union broke up forced the population to grow food locally. The diet of urban Cubans shifted to include more beans, pulses and vegetables. A big chunk of the produce is grown organically but intensively in urban farms.

It can be done. Maybe even in our lifetime.

 

 

Stranded assets

My analogue television is a stranded asset. It has perfect picture and sound, plus it has worked this way for years without a flicker. Only now there is no signal for it because we have moved into the digital age.

I could complain. My investment in that analogue TV still had time to run – I expected to get entertainment returns from reruns of the Simpsons for years to come.

Instead I was forced to purchase another asset, either a set-top box to convert the signal or a new digital TV. I chose the second option in plasma. By doing so I wrote off any returns from my stranded asset and made another investment.

And the world did not end.

In fact I did what the economists, politicians and business owners want; I made another purchase.

It would be interesting to see what would happen to the performance of super funds that have invested in fossil fuel power plants if those assets were also stranded. No doubt returns would take a hit, but again, I doubt that the world would end.

We are always told that superfunds, the investment vehicles that take a proportion of our before tax income that in Australia is a compulsory 9% of salary paid by all employers on behalf of their staff, are risk adverse investors. Surely then, they should have balanced portfolios.

Presumably someone has done the sums, but I would guess that the inherent and irrational volatility of the markets is a far bigger hit that the loss of some power stations. And like the banks that chose to lend to the Greek government, they might not be as sure of their returns as they think and they may not get a bailout.

So the noise and bustle over the loss of these assets to accommodate the necessary change to alternative fuels is really vested interest. It comes across as a rail against a redistribution of returns but in really, it is the fear that they might actually have got the investment wrong. That in following what they claimed was conservative investment management they, in actually, were taking a huge punt.

This reality comes for adherence to growth economics 101.

To keep economic growth happening, funds must be mobilized to generate new assets, goods and services. How else are the GDP numbers expected to grow?

In fact we do it all the time. It’s just that we are so under the thumb of the current set of asset holders we forget that as part of normal economic activity some assets will do well while others fail. It is a normal pattern of economic activity. Consequently there will always be stranded assets; and the world will not end.

More importantly we will have to spend to create new assets to allow us to complete the transition from fossil fuels without seeing the end of the economic world.

 

A future economy

Over the past 120 years ago the have been an average of 114 million sheep grazing on Australia paddocks producing wool and meat for export. In 1970 the numbers peaked at 180 million. Today there are still 72 million sheep but there are also mines making Australia the 2nd biggest global producer of iron ore and 4th biggest producer of coal. Australia the country has done very nicely out of the natural resources of the world’s largest island.

In time the Australian economy will need to make money from something other than natural resources. This is a significant reality for a society that was created on the back of the sheep and now rides high on coal trucks and ships laden with iron ore.

“No worries, mate,” some say. There is plenty of time. There will be generations of demand for those salable mineral resources from the 4 billion people who still don’t have a washing machine but would dearly like one.

Plus we could always go back to sheep. For soon there will be 10 billion humans to be fed and we have all that wet and wonderful land in the north to turn into a food basket.

I joke not. The latter idea is under serious consideration by the right leaning Federal opposition party. Equally there are those who would see remaining forests in the east paved to provide the living space for 100 million.

And maybe that is enough. There could be another 100 years of wealth in natural resources grown on and dug up from the land and immigration to provide local customers who will buy houses, white goods and visit air-conditioned shopping malls.

But I would think we need something else; at least a couple of alternative sources of external income. Not least because there will be a need to find something for everyone to do. Else the nation becomes a handful of miners and hi-tech farmers supported by millions of shopkeepers (or, more likely, couriers for online stores) and civil servants. And not everyone can be those; and already 3 out of 4 Australians in the workforce are paid for delivering a service of one sort or another.

So what would the else be?

Presumably something that the people are good at, have an aptitude for, and makes sense economically. Sport perhaps.

Commentators in the US have asked the same question of their nation. One of their answers is for the US to drive the technology revolution needed to shift our energy supply away from fossil fuels. They have capital, smarts, institutions, and the all-important entrepreneurial spirit. That they are being left behind in this by China and Germany also supplies plenty of motivation.

Australia lacks the scale of entrepreneurial spirit and risk capital to make innovation become a serious earner. Sole trading we can do, but a desire to build empires from small beginnings is rare. Consequently, the risk capital that runs at close to 10% of commercial investment in the US barely makes it to 0.1% in Australia. This lack of support requires that most innovators with a big vision must find what they need overseas.

So what does Australia have? What it has always had; abundant natural resources.

It makes sense to use the vast landmass, the myriad animals and plants, the minerals in the earth and become a regional, even global, breadbasket. Not least because Australia does have smarts, capital, infrastructure and the experience to overcome the significant practicalities that such a mission presents.

Only water, nutrients and labour are in short supply. Land must be managed carefully to avoid soil degradation and salinity. There has to be a careful eye on the changing weather and an ability to drought proof agricultural production.

Australia has a well-developed system of regional natural resource management, generations of farming experience, research and innovation capacity, a world-class tertiary education system and an emerging culture of prudent agriculture epitomized by the Landcare movement. It has what it takes.

This is not a proposal for turning the tropical savannas into laser leveled rice paddies, at least not everywhere, or to continue with meandering livestock left to their own devices and rounded up once in a while for market. This is a call for a radical change to agriculture that will make it into a smart, sustainable production system that accounts all production costs and harmonises output to the capacity of the landscape. In short, to create a totally new way that requires the engagement of everyone.

Why not do it? Create a robust economy on sustainable use of natural resources.

Peeled potatoes

In our world of doing it all easy, the latest labour saving option in the kitchen is pre-peeled potatoes.

What an outstanding idea. No need to whip out the peeler and waste time or get mud on your fingers. No more peels to get rid of and litres of water are saved from not having to clean off the grubby bits.

What, you are kidding!

How lazy can we get? It takes no effort at all to peel a potato or two. This has to be consumerism gone mad. ABC radio host Richard Glover thought so and created a funny skit to point out the craziness.

Only there are a couple of things.

First thing. An inevitable consequence of a market mechanism is that new products will emerge. Whatever people will buy, whether they really need it or not, the market will provide. The market will also provide things that they hope people will buy, often well before customers recognize that they might have a need for it. In the end, if a product works for even a few of us then it may be worth manufacturing. Witness, ‘peeled spuds in nitrogen’.

Second thing. There is always an opportunity for more efficiency in they system. If the supplier of the potatoes also recycled the peels into compost, this would be useful second product from the potatoes. Very few of the customers would do this and even if they did there would be no scale benefit.

We are at the stage where every nutrient and kilo of organic material that goes back into our agricultural soils is worth the effort given that fossil fuel based fertilizers are rapidly becoming another of our limited resources.

Our system of resource use is so bloated that there are efficiencies that will help our sustainability just about everywhere. All we have to do is look. One of these efficiencies, conversion of organic waste into fertilizer, will become commonplace. As will novel ways of doing it.

The idea that the recycling happens before the product reaches the kitchen might just be one of the better ones.