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The growing world population and world economy are driving the long-term demand for raw materials - and therefore their prices - upwards. It is not enough for German firms just to take the role of observers but rather to find intelligent solutions, so that they can be net beneficiaries from global upswings despite increasing raw materials prices. The penetration of the international raw materials markets by the major developing countries and possible politically-motivated shortages in raw material supplies mean that closer cooperation with the politicians is necessary. This is the only way to secure the raw materials basis, for the long term and within acceptable limits, for many industrial sectors and private households. The latest EU initiatives appear to be headed in the right direction and give reason for optimism.
Agriculture is both a major emitter of greenhouse gases and a potential key contributor to the mitigation of climate change. Besides lowering emissions, climate-friendly agricultural practices can play a significant role in sequestering carbon. So why is the current debate on mitigating climate change largely ignoring the potential of agriculture and land use? In this paper, we analyse various approaches to realising this potential and discuss some of the challenges involved. We also indicate actions required for transitioning towards a low-carbon agriculture. We show how governments, agricultural producers, the food industry, consumers and the financial sector are all key players in shifting policy and investment priorities.
In spite of small short-lived decreases in late June and early July, global food prices remain at high levels and volatile. Food prices in July 2011 were significantly higher than a year ago and close to the 2008 peak levels. The World Bank Food Index in July was 33% higher than a year ago. Corn and wheat prices declined in June/early July before rising again. The price of rice fell from February to May, but has since increased.
Australia is one of the biggest carbon emitters per person. However, releasing carbon into the atmosphere is free in Australia at the moment. Undoubtedly, putting a price on carbon emissions is thus the right thing to do. Australia is proposing a hybrid carbon price, starting with an interim fixed price before switching to an emissions trading scheme. Using a transitional carbon tax can be reasonable as a tax is easy to implement and might help liable entities to warm to the idea of a carbon price. However, transition to a more sophisticated and efficient trading scheme should be guaranteed.
Speeding up the integration of renewable energies into the electricity supply system requires an efficient grid infrastructure and thus also major investments. The global market for smart grids is worth EUR 100 bn. Interlinking the power grid and the data network considerably increases the complexity of the traditional business model. In order to handle such data volumes sensibly power companies will have to fundamentally restructure both their infrastructure and business models. This opens up the possibility of new competition scenarios and cooperation between previously discrete industries – not only power supply and the communications sectors in particular but also the petroleum sector (especially via electromobility). Nevertheless, the data collected using this new business model is quite revealing with regard to personal lifestyles. The issue of protecting privacy will thus become a key criterion for customer acceptance of smart electricity meters and modern power supply networks.
The German government has risen to the challenge of securing the country's electricity supply on a sustainable basis beyond its declared exit from nuclear power in 2022. However, the growing significance of renewable sources of energy will lead to an increase in supply volatility. For this reason, there needs to be not only a large-scale expansion of the transmission grids (supergrid), but also a drive for “intelligent” distribution grids (smart grid & smart metering) in particular. As such, the new Network Expansion Acceleration Act for the power industry is a first step in the right direction; nonetheless, this must soon be followed by further steps so the energy and environmental policy objectives in Germany and Europe can be achieved.
CCS is only one pillar in international climate protection policy, but certainly an important one. However, it currently does not seem likely that this pillar will be able to bear its load as planned for the coming two decades. Without CCS, though, the 2°C target would be in even greater jeopardy than it already is. Politicians’ general commitment to CCS and the realisation that the technology can make a valuable contribution to climate protection must therefore be followed by action: first and foremost, further research must be carried out and, second, price signals for CO2 would be required for its implementation.
In light of recent events, we provide here a short-term outlook for food prices, as an update and complement to our publication from last March. It relies on the most recent estimates from the FAO (Food and Agriculture Organization of the United Nations) and the USDA (United States Department of Agriculture) as well as expert opinion. While global estimates are generally known to be difficult to assess, predictions at this stage are especially tentative since spring planting has not been completed in the Northern hemisphere and has not started in the Southern hemisphere.
Over the next few years, large-scale investment must be made in the water sector throughout the world. Last year, we put global investment requirements at roughly EUR 400 to 500 bn per annum. In the final analysis, the huge need for investment is a result of the 3% increase per year in the demand for freshwater.
Food prices are reaching record highs, which raises concerns about spending capacity, hunger, political turmoil and global growth. The current surge in food prices is due to the combination of short-term supply shocks and longer-term structural factors leading to a tight demand-supply balance. In this paper we review the main considerations regarding food price movements and include a discussion on the impact of speculation.