The new scarcity?

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Gregory,

Former World Bank economist Herman Daly has used the term "full world" to describe an increasingly crowded planet whose people demand ever more materials and energy. I like the term because it neatly sums up this stage of our civilization. If the 20th century were an era of resource-intensive expansion and new frontiers, the 21st will be about adapting to greater limits on resource use. Oil, water and arable land are all finite resources, yet human demand for them is on a steady upward trajectory.

Consider oil. The concept of a coming peak in oil production is increasingly accepted even by mainstream organizations. The World Energy Council, for example, recently predicted that the peak of global oil production would arrive within 15 years -- this in a world whose energy demand, says the council, is projected to double by 2050.

Similarly, 47% of the world's population will live in areas of severe water stress by 2030, according to the Organization for Economic Cooperation and Development. Scarcity reveals itself through extreme and costly measures of supply: Desalination capacity globally is up by 45% in the last five years, with similar growth projected through 2012. On a local level, the government of Spain's Catalonia region declared last month that it would import water by boat and train to get through the summer.

This isn't just about human beings -- nature must have its cut of resources too. Water, for example, is vital to wildlife and healthy ecosystems, not just farms and factories. And the atmosphere needs carbon-free space to provide a stable climate. Nature's demands, more apparent and more insistent in a full world, add to our resource scarcity.

Scarcity does indeed raise prices and stimulate efficiency improvements or a shift to substitutes for scarce items. Already we see the use of hybrid vehicles, compact fluorescent lightbulbs and myriad other efficiency measures flourishing in our economy. Biofuels are increasingly used in place of gasoline. But the efficiency and substitution strategies have their limits.

Greater efficiency often carries a rebound effect: Efficiency can reduce consumption and lower prices, which can stimulate even greater demand. U.S. economic output per cubic meter of water used increased 2.6 times between 1960 and 2000 because of efficiency gains, and the same story holds for energy use. But scarcity of water and U.S. oil increased anyway, as a growing population demanded more overall of each resource.

The vital resources in short supply today may have no easy substitutes. What will substitute for water, the essence of all life on this planet? What will substitute for rich land suitable for agriculture? What will have all the upsides of petroleum without its pollution and climate downsides?

We are a creative species that will adapt to scarcities -- even scarcities of fundamental resources. But this much is clear: The scarcities of oil, water and land are increasingly real.

Gary Gardner is a senior researcher at the Worldwatch Institute, where he is also co-director of the report, "2008 State of the World: Innovations for a Global Economy."

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Gary,

Since the Industrial Revolution, the prices of oil, coal, foods, metals and timber have fallen drastically relative to wages. You propose that that 250-year "commodity holiday" has now come to an end and that we face a future of scarcity. That is bad news for Californians, who live their lives predicated on cheap gas, cheap food and abundant water.

However, before people abandon their suburban ranch houses and SUVs, they should note that history has not been kind to those many commodity Jeremiahs who have prophesied scarcity on the basis of commodity price spikes.