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Newsletter 28th September 2007

- Set-aside set aside (for now) - Increasing the ocean's capacity for CO2 - Time for a Severn barrage?

Set-aside set aside (for now)

The requirement for Europe’s farmers to leave some of their land (currently 10%) fallow was introduced about fifteen years ago, amid concerns that the direct production payments then being made under the Common Agricultural Policy were encouraging the formation of some interesting new geographic features, including wine lakes and butter mountains. Set-aside was designed to reduce production of grain which at the time was contributing towards an increasing global surplus.

We now seem to have moved beyond a time of surpluses and falling commodity prices to a new environment where world cereal stocks are at their lowest level since the late 1970s and market prices have risen quite dramatically. Wheat prices are now three times higher than in 2000. Against this background, Europe’s agriculture ministers have agreed to a zero rate of set-aside next year, although it has not been abolished and there remains the possibility that it will be raised again in later years.

There has been much talk recently about the bio-fuels boom pushing up food prices, but the truth is rather more nuanced than that. True, farmers in the US have seen a large new market open up for maize to be turned into ethanol, but relatively little wheat is used for this purpose. The major part of bio-fuel production in the EU, for example, is diesel, using imported palm oil or local rapeseed oil as its feedstock. So competition between food and fuel is not the primary cause.

Part of the answer lies in this year’s weather. It is not only Europe which has had a poor summer and reduced yields. Canada, for example, one of the major wheat exporters, had a 20% reduction in its harvest. Inevitably, this pushes up prices, as demand exceeds supply. But this is a one-off: next year, harvests may well be better.

The root cause, and one which will continue to drive markets over the long term, is simply increasing demand for food and feed. First, there are simply more mouths to feed: the world population reached 6 billion in 1999, is now at 6.7 billion, and is likely to peak at somewhere below 10 billion later this century. Second, much of the population growth is in rapidly developing countries (China included) where increasing prosperity leads to greater meat consumption. Since it takes many kilos of grain to produce a kilo of meat, crop production has to rise faster than the rate of population increase to account for this. By 2050, we are likely to need at least a doubling of grain production.

This inevitably means that all reasonable quality farmland will need to be brought into production, meaning that the days of set-aside are numbered, if not already over. Prices will rise, perhaps ending a long-term trend for food to be a smaller and smaller part of household expenditure in the developed world. European farmers will benefit. The incentives to make farming more productive in other regions will increase and the use of the best available technologies – including biotechnology –  to increase effective yields will surely accelerate.

But this will not please everyone. Environmentalists are concerned that the loss of set-aside will leave many birds without nesting sites or enough food. Ultimately, we can only hope that a sensible balance will be struck between food security and biodiversity.

Increasing the ocean’s capacity for CO2

Initiatives to reduce carbon emissions, on the understanding that this will mitigate projected future global warming, seem fraught with problems. The modest demands of the Kyoto protocol will almost certainly not be achieved by many apparently committed countries. There can be no certainty about the outcome of negotiations aimed to bring all countries – including the USA and major developing economies such as China – into a binding framework of far more stringent emission reduction commitments. If they are successful, there are absolutely no guarantees that targets will be met. If carbon dioxide levels really are as important as the IPCC believes, we need to look at more radical solutions.

One suggestion which has often been mooted is to fertilise the oceans with iron – the rate-determining nutrient – to boost algal growth and so capture larger quantities of carbon dioxide.  Now comes a clever and perhaps neater way to achieve this: pump cold, nutrient-rich water from the ocean depths to the surface, using the sea itself as the energy source.

This innovative approach has been put forward by two prominent scientists who are deeply pessimistic about the consequences of climate change if left unchecked: James Lovelock, perhaps best known for his Gaia hypothesis, and Chris Rapley, new head of the Science Museum and previously director of the British Antarctic Survey. It is also being developed separately by an American company, Atmocean.

Long vertical pipes would float in the tropical ocean, tethered to buoys. As they sink in the swell, cold water would enter the pipe from the bottom, but would be prevented from leaving as the pipe rises by a non-return valve. The net effect is to pump the cold, nutrient-rich water to the surface, which would encourage the growth of a range of organisms. All would sequester carbon and remove it to the ocean bottom, via their droppings and when they die. Algae would additionally produce dimethyl sulphide, which promotes cloud formation and would thus have a cooling effect.

The challenges would, of course, be huge. Atmocean calculates that 134 million pipes would be needed to sequester one-third of the carbon dioxide produced by burning fossil fuels each year. No-one knows about the life of the valves, or the effect on the marine environment. Nevertheless, it is an interesting idea which deserves some thought. Many environmentalists will object to the very idea of a “technical fix”, but progress is most often made by way of ingenious ideas.

Time for a Severn barrage?

Wind and solar power are problematic because of their intermittent nature. Wave power is very much in its infancy, although the recently announced plans for a facility to be built off the Cornish coast may help it make progress. However, the output from this is also variable. Tidal power, on the other hand, is very predictable and so, in the right location, could in principle be a very interesting contributor to the renewables sector.

The government has announced that the often-mooted Severn barrage scheme will now be the subject of a major feasibility study. In principle, such a barrage could produce about 5% of the UK’s electricity, but not without potential major environmental impact. If the mud flats in the estuary were to be destroyed, we would lose a major bird habitat. This may only be a local concern if the birds can find alternatives but, if there is none, then it would have a direct impact on their populations.

Hard choices lie ahead, but if a suitable compromise can be found then we may all be winners.