“Green Peace, Energy, Europe and the Global Order”
Speech by Rt Hon David Miliband MP, Foreign Secretary.
Ralph Miliband Lecture Series
London School of Economics
7 May 2008
1st Part
It is a great honour to be speaking at the LSE. To do so in a lecture series in memory of my father's contribution to the School is poignant and a little ironic. Poignant because my dad is not here to listen. Ironic because his view of the School was a mixture of fondness for the people and frustration with the institution. His view of the Labour Party was also a mixture – not of fondness and frustration but frustration and despair. So the idea that his son would be speaking at LSE as Labour Foreign Secretary would have summoned pride and prejudice in equal measure.
My dad always described himself as a socialist, but also a teacher. When people tell me that his books made a difference to them it gives me huge pride. But they also tell me they remember his classes. As a teacher he was determined to engage the minds of his students. Perhaps surprisingly for someone of strong, in fact very strong, political views, he went out of his way to talk up and discuss alternatives to his own point of view. That spirit of openness and inquiry explains I think the bequest that funds the lecture series, the books and the scholarships that bear my father's name in the Ralph Miliband programme at the LSE, and which have been brilliantly driven forward by Professor David Held since 1998.
I think the origins of the programme are important. It is funded by a bequest from an LSE student. The donor, who never wanted to be named, was helped by my dad with his thesis in the early 1950s. He described his relationship with him as follows:
“I am not a socialist. I try to be open-minded and non-partisan. Ralph and I were not always in agreement about specific ends. That is unimportant. What counts is his willingness and ability to avoid doctrines and socio-political traps. His work and spirit should not become a mausoleum for dead thoughts, like the various churches and political parties that strew the intellectual landscape. That should clarify my wishes – to establish a living, breathing adjunct to the LSE traditions of the Webbs, RH Tawney, Harold Laski and all of us who came to the LSE in their spirit.”
My dad spent nearly thirty years of his life associated with the LSE. He gained admission a year or so after arriving in the UK in 1940, fresh from learning English and completing his Matriculation at Acton Technical College. After being demobbed in 1945 he came to Houghton Street to complete his studies. By the early 1950s he was on the faculty and stayed here until 1972.
Given my berth at the Foreign Office, I found an amusing item from the LSE student magazine The Beaver. The date is 1958: “Dr. Miliband is a very popular lecturer at the school. He takes every opportunity to meet students…He is quick at grasping and anticipating questions, and talking with him makes one wonder whether the man across the table is some sort of dignitary at the Foreign Office.”
Which brings me to today's subject. Other speakers in this series have come from the worlds of business, economics, and academia. I am a politician, and I want to address the politics of energy and the global order. Since I am Foreign Secretary, I want to talk about the international politics of the issues that have dominated this series.
If you want to skip the lecture and know the conclusion of my argument – I confess to using that tactic as a student - it is as follows. We face a new resource crunch, with spiralling energy and food prices as well as water shortages. Its origins are carbon dependence. Its consequences are not just economic and environmental, but geopolitical. We risk a scramble for resources, with each nation pitted against the other. The alternative is a transition from a global economy dependent on oil and gas to a low-carbon economy with a diverse mix of energy sources and suppliers. And the best way to set a new global course, in fact the only real means at our disposal is through leadership from the European Union – the largest single market in the world, with the clout to set global standards.
Two global orders
I want to start with what I have seen in foreign policy over the last nine months. Two trends are visible, rubbing up against each other.
The first is a world built in reaction to the disastrous consequences of balance of power politics of the first half of the twentieth century. It is a world where national interest is pursued through international co-operation. It recognises that flows of people, money and products are making countries' prosperity and security more intertwined than ever. And it accepts that to address the shared threats we face - from financial instability and climate change to nuclear proliferation – we need to work together through shared rules and institutions, from the EU to NATO, the WTO and UN.
The second is a world where national interest is still pursued through competitive rivalry. Notions of interdependence and multilateral co-operation are dismissed as a passing fad. International relations is a zero sum game where nations compete for power. From trade to nuclear proliferation, the danger is more insecurity.
To emphasise, these are not competing visions of international interest on the one hand and national interest on the other. They are two different visions of how national interest is pursued. Multilateralism is not the betrayal of modern national interest, but its expression.
For much of the last decade, we have spoken as though co-operation will win over competition. We have tended to see globalisation as an inevitable force sweeping all before it. But the truth is that the globalisation of the 21st Century is as fragile as the globalisation of the 19th century – which ended on the streets of Sarajevo in 1914. Then, as now, there are big gains, often invisible, from globalisation. Then, as now, there are important insecurities, often all too visible. And I believe that the resource crunch we now face is the fulcrum on which this all turns. If we fail to address the problems of scarcity and high prices in respect of fuel, food and water, the traditional paradigm of competitive, balance of power politics threatens to return with a vengeance. But if we succeed in finding new, innovative ways to meet the growing demand for natural resources, the newer paradigm of co-operation and collaboration will win out.
The Resource Crunch
Let me start by setting out what is driving the resource crunch, and how we can address it.
First, a richer, more crowded world is propelling a surge in demand for natural resources. The global population is projected to rise from 6.6 billion now to 9 billion in 2050: an increase the size of the total global population in 1950.
As Michael Klare pointed out in his lecture in this series, the world is facing the most rapid and the largest build up in the demand for energy in modern history. All of the rise is coming in developing economies so that by 2025 the global South will have higher demand for energy than the North.
As India, China and other developing countries enjoy rapid economic growth, their citizens want and can afford the standards of living enjoyed in industrialised countries. They are driving more cars - 20,000 new vehicles appear on Chinese roads each day. And they are consuming more electricity – two additional coal-fired power plants each week to feed the Chinese grid.
Second, energy demand is growing at a time when the supplies of cheap oil and gas are dwindling. Oil and gas supplies are becoming far more costly to extract as more accessible reserves have been depleted and raw material prices rise. Supply is concentrated in countries whose governments directly control their hydrocarbon industries, and are developing them more slowly than consuming countries might want. Some of them might be prepared to use their natural resources as instruments of foreign policy. In the UK, as North Sea Oil and Gas supplies are depleted, we are becoming increasingly dependent on energy imports.
As a result of rising global demand, we are seeing investment in alternatives to oil and gas. Some are better for climate change such as nuclear and renewables. Others are far worse, such as coal and oil sands. Over the next decade, the most likely effect of growing insecurity of oil and gas is a dash for coal - a resource that is relatively cheap, abundant in many countries, but far worse for carbon emissions.
Third, we are seeing an extraordinary period of food price inflation. Rice hit $1000-a-tonne for the first time last week. The UN Food and Agriculture Organisation say food prices rose 57 per cent between March 2007 and March 2008. The World Food Programme is warning of a silent Tsunami plunging another 100 million people into starvation. There have been protests at food price rises in Egypt, Morocco, Mauritania, Ethiopia, Indonesia. In Haiti the Prime Minister was dismissed after days of deadly protests and looting.
The causes are manifold: global demand has surged, but supply has not kept pace. Higher energy prices have pushed up the costs of fertilisers and irrigation, making them unaffordable for many farmers in developing countries. Adverse weather conditions – such as a ten year drought in Australia - are limiting the land available for food production. Biofuels, not necessarily bad in themselves but sometimes sponsored without proper concern for sustainability, have prompted the cultivation of fuel-crops where food-crops might otherwise have been grown. Meanwhile, the World Bank estimates that demand for food will rise by 50 per cent by 2030. This is why Gordon Brown has written to the Japanese Prime Minister, as Chair of the G8, proposing an international strategy to address both the immediate hardship and the medium-term challenges.
Fourth, 500 million people live in countries chronically short of water. By 2050 this figure is expected to rise to 4 billion. In northern China, a sinking water table means wells need to be dug much deeper and more pumping capacity installed. A falling water table and lack of power to run pumps has led to a serious shortfall of drinking water in Bangladesh's capital, Dhaka. Irrigation will become more difficult, more expensive, and more energy intensive. Farming, both for food and for biofuels, will be affected by water shortages.
The future consequences of this resource crunch, are not just economic, they are geopolitical:
• the main energy consumers, in particular the US and China, competing for limited resources. There is already a scramble in Africa - the fastest growing source of new oil in the world
• the main production sites as the source of rising tensions, whether dormant border disputes in the Gulf or countries pushing claims to their share of what could be a quarter of the world's undiscovered oil and gas in the Arctic. About a third of the world's civil wars are currently in oil-producing states, up from a fifth in 1992. And among developing countries, a country that produces oil is twice as likely to suffer an internal rebellion as one that doesn't.
• the main transit routes increasingly important to energy security, with Turkey playing a key role in bringing oil and gas from both the Middle-East and central Asia into Europe; shipping routes across the Caspian and Black Seas increasingly critical to European energy security; and two thirds of Asia's oil consumption depending on free passage through the Straits of Malacca between Indonesia and Malaysia
• and all the while economic power shifting to oil and gas-rich states and the elites within them. The vast majority of oil and gas in the world is now supplied by state-owned companies. The revenues accruing from high-energy prices can then be used to buy up foreign assets. And, as Thomas Friedman has argued “soaring oil prices …strengthen antidemocratic regimes.” Resource rich regimes have less incentive to enter into bargains with their own people. “No taxation without representation” is meaningless when fuel revenues negate the need for taxation.
If we are to avoid these consequences we need to address the causes of the resource crunch. Dependence on scarce and vulnerable supplies of hydrocarbons is forcing up energy prices. Higher energy prices and pressure on land is forcing up food prices. Climate change exacerbates water shortages and the availability of agricultural land in some parts of the world.
People warned of the danger of oil dependence after the 1973 oil crisis. But global warming changes the equation in a fundamental way.
If climate change didn't exist the answer would be more straightforward. We'd switch to coal and possibly oil sands too for cheaper energy and greater security of supply. But our hydrocarbon dependence – at least when the carbon is emitted into the atmosphere – exacerbates the problems I've described. It exposes us to both energy and climate insecurity. So we need to shift to low carbon, investing not only in renewables and nuclear, but also moving forward with Carbon Capture and Storage to limit the damage of our continued dependence on coal.
2nd part in next edition of Chevening Connects
