If the earth could speak to us what would it say?
“Help me to help you?” “Enough is enough!” There are just too many people on planet earth now – with not enough food, not enough fuel and not enough shelter to go round. Our resource constrained world needs our support on every level, and what we put in right now, we might just reap the rewards from, in more ways than one. But how can the individual investor play a part? Intelligent Partnership have produced an infographic (below) to help explain just how much help the earth needs .
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Our population is growing at a rate never seen before in history. It took from the dawn of time to the early 1900’s to reach a global population of 1.6 billion – and just the 20th century to more than quadruple that. According to former U.S. Secretary of Agriculture Dan Glickman, the world population will increase from about 7 billion now to 9.3 to 9.5 billion by the year 2050.
This of course has dramatic and far-reaching implications on the earth’s ability to sustain us all. We will require a lot more food ― 70 percent more by many accounts, since higher living standards will increase demand by a higher percentage than just the population growth alone.
We are also going to run out of fossil fuels for energy – fact. Reserves are finite (ie NOT renewable). Fossil fuels have been serving their purpose since the dinosaurs buried their bones for us to dig out of the ground in the form of coal and oil for thousands of years – but we have not been replacing these natural sources for future generations to mine. Our great-great grandchildren can’t wait the 1 million years necessary for us to recreate the fossil fuel bonanza for them. Some estimates say we will dig the last drop out of the earth within 130 years – yet demand for energy continues to grow exponentially.
Food security and the need to produce biofuel is also driving a great ‘land-rush’ with foreign investors, particularly the Chinese, buying up huge tracts of land in Asia, Africa, the US and now Argentina. Bloomberg reported last year “Investors are pouring into farmland in the U.S. and parts of Europe, Latin America and Africa as global food prices soar.”
The two biggest users of petroleum worldwide, the aviation industry and the Pentagon have also shown their commitment to the use of biofuel. In June 2012 both Air Canada and Azul Brazilian airlines completed demonstration flights following in the footsteps of Quantas, and Airbus and Boeing have signed collaboration agreements to accelerate the commercialization of sustainable biojet fuel. The US Navy is being called the ‘Great Green Fleet’ after nearly a million gallons of biofuel was shipped out to the first carrier strike group to be powered largely by alternative fuels.
The need for our total commitment into developing alternative ways for feeding and providing energy for the world is now. We have no choice; human demands on energy and food will not decrease…. and sometime soon the earth will simply say, in the words of US Senator Jim Tester at the Future of Food Summit; “ Enough. Too many people”.
What’s to be done?
How then can investors best get on board with these global megatrends? Anything that has a fundamental and long term impact on economies presents opportunities. Ethical investing is also shedding its previous assumptions of low returns as demand for renewable and sustainable solutions gathers pace.
Investment in biofuels could also lead to a significant boost in economic development, including the creation of new jobs and new sources of income for farmers. This would be of particular benefit to developing countries in which a large proportion of the population are employed in agriculture. They are greener and cleaner – thus reducing emissions and chucking back tonnes of carbon into the atmosphere.
Investment into sustainable agriculture also provides developing countries with opportunities for growth. The main principle is that we must meet the needs of the present without compromising the ability of future generations to meet their needs. Last year global food prices rose by one third and the demand for meat (and therefore cattle feed) has never seen such a strong growth trend. Infact Glickman has called agriculture ‘…the plastics of the modern era.”
With the Eurozone lurching from one crisis to the next, investor confidence worldwide has been shaken. Cash is returning negatively and gold remains volatile. Traditional routes of investing are no longer the safe havens they once were. Tangible alternative investments which are able to be held in directly or in a pension arrangement are gaining popularity with individual investors as a way of gaining greater control over their future and finances. The ability to leave a legacy to children in both monetary, and ethical terms is also very compelling – alongside potentially high returns. With stringent due diligence now in place for many so called ‘esoteric’ investments much of the uncertainty surrounding these new asset classes has been ruled out.
The United Nations are now firmly committed to sustainable development and with high profile summits such as Rio +20, fully recognise a change of course is necessary as a matter of critical urgency. This resource crisis could be the game-changer that results in a global shared desire to heal ‘Mother Earth’.