Food & Energy Prices, & Climate Change

Aug 30th, 2008, in Business & Economy, by

CallumCallum on the inter-relation between rising food and energy prices, and climate change.

Green Indonesia

In his speech on August 19th to mark the 63rd anniversary of the founding of Indonesia’s foreign ministry, President Yudhoyono spoke about looming global crises and what the country should do to meet these challenges. The three areas of concern he outlined were Food, Energy and Climate Change.

Like most things in the modern world these crises are not happening in isolation, they are in fact very interrelated. Any effort to try and stem them must first understand how they relate to each other and that solutions in any one area will have an impact on the other areas. This article will look at the causes of the 3 crises. In future articles I will look at their potential impacts and at concrete steps that Indonesia can take now to help limit their impact globally and locally and technologies that may offer long term solutions.

Before you can solve any problem you must first gain an understanding of its underlying causes, first we will look at the causes and how they interrelate to each other.

Climate Change:

The planet is getting warmer. You may not notice it here in Indonesia where it is always warm, but at the Northern and Southern extremities of our planet the change is noticeable and rapid. In Greenland, a region associated with a permanently frozen climate, people are for the first time able to grow vegetables. Glaciers throughout the world are in retreat and both polar caps are noticeably disappearing. It is predicted that within 20 years at its current rate of decline that the Arctic icecap will have completely melted and the Polar Bear will only exist in zoos.

The primary cause of this global warming is Carbon Dioxide (CO²). When we burn fossil fuels we release CO² into the atmosphere. Some of this is absorbed by plants, trees and the oceans. But much of it is not absorbed and gradually builds up in the earth’s atmosphere. As the CO² level increases more of the suns energy is trapped by the atmosphere raising the planets temperature.

Most of the CO² emissions globally are produced by power generation and industrial processes. As Indonesia’s economy develops, these will become a larger source of our emissions. Currently in Indonesia the biggest contributor is slash and burn farming methods used to clear land. It is such a large contributor that Indonesia is the world’s second largest emitter of CO².


As anyone who has lived in Indonesia during Ramadan can tell you. When demand increases for a certain food item, so does the price. Every Ramadan as people increase their consumption of the compact calories offered by meat, the price of that meat rises. What is happening to global food prices is the same. As more people in the developing world lift themselves out of poverty meat becomes a greater source of their caloric intake. Because it takes 10 kilograms of grain to create 1 kilogram of meat, this rise in demand for meat also impacts of the price of grain. In Indonesia we see this in rising prices for rice and bread.

Another source of rising food prices is the use of agricultural products as biofuels. In America a large portion of their corn production that used to be primarily used as cattle feed is now being diverted to the production of ethanol. In Brazil the same is happening with sugar, which is also being used to produce ethanol. In Indonesia we are seeing rises in cooking oil prices because a large portion of the palm oil crop is now being diverted to produce biodiesel. This trend has its roots in the rise of fossil fuel prices. As gasoline and diesel prices have risen, it has become cost effective to use these agricultural products as alternative fuel sources.


World energy prices have been rising also because of the changes in the developing world. As the rapidly developing economies of China, Brazil and India have been lifting millions of people out of poverty the demand for their share of the world energy pie has also grown. Whether you are looking at oil prices being driven by people’s demands for cars and motorcycles or coal and natural gas prices rising because of increased demand for electricity, they all are an effect whose root cause is economic growth in the developing world.

The 1 billion people on the planet in the first world now have to compete with the 5½ billion other people that they share this planet with for a finite fossil fuel resource. It is only right that the world’s resources are shared equitably but we must face the fact as the world’s population grows to 12 billion people in 2050, that unless we change how we use these limited resources, there will not be enough to go around.

One Comment on “Food & Energy Prices, & Climate Change”

  1. Purba Negoro says:

    Good article Callum- it is a very complex debate.

    According to a quick wikipedia search- the world cannot provide enough land for fuel-based agriculture and leave enough for food for consumption.
    Also bio-fuels are argued as “hydrocarbon recyclers”:
    it “costs” as much energy/resources to make biofuels as they allegedly save.
    Thus no nett reduction of emissions, and if the industry grows- the nett effect is growth in undesirable emissions.

    Palm oil industry is notorious for destruction of forest for sole-species plantation- and the West is guilty of de facto sponsorship of this environmental destruction.

    India and China well within their rights to safeguard their energy security have opted for a resource they have cheap and secure access to- coal.

    The whole debate leads to many uncomfortable other questions- should we start decreasing world population?
    What right does the 1st world have to oppress the majority poor?
    Then the issues of GM food cropping and IP rights on plants.
    Can plants be patented?
    Why does the first world have more rights to IP on plants than the plants’ original nation?

    Then the issues of GM food cropping and IP rights on plants.
    What alternative foods/food sources should we look into?
    What about alternative food farming practices?

    For example- soy bean tempe- once called Javanese meat- provides the same if not more protein per portion than animal meat- yet requires less energy and resource to produce. Same for Shiitake mushrooms.

    Summarily- the West caused the problem- so it is entirely their responsibility to fix it.
    It is unjust, immoral and offensive in the extreme- the negligible polluting Third World be inconvenienced by the global minority and their First World Greed.

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