Windmills, ethanol, tortillas, Malthus and sinking nations. Oh, and online gambling, too.

I was talking with my father-in-law about the new windmill installed at Jiminy Peak, a ski area about five miles from our house. It’s been warmly received by most locals, but I figured my father-in-law – a cigar-smoking, SUV-driving Texan who’s rarely mistaken for a treehugger – would raise the issues of land value, viewshed and other arguments offered by real estate folks about the “dangers” of wind energy.

The 1.5 megawatt turbine on Jiminy Peak. Photo by Swerz.

Nope. “I support all sorts of alternative energy. All except for ethanol. That’s a terrible idea. It’s already making it impossible for the Mexicans to buy tortillas.” He’s right – corn prices have increased almost 70% from late 2006 to 2007, and there’s a strong correlation to the fact that the use of the US corn crop to produce energy has risen from 18% to 25% percent of the total crop. Mexican tortilla manufacturers are usually made from US corn, and as a result, tortilla prices have gone up 3-4 times in some communities, forcing the Calderón government to negotiate a voluntary price ceiling on the commodity.

It seems downright Malthusian to be worried that a global thirst for energy is going to cause people to starve. This seems like the sort of problem that markets are very good at solving in a couple of years – it’s likely that some Mexican and American farmers will see the advantages of planting corn given the high prices and supply will expand to meet demand, bringing prices down. That won’t forestall current tortilla shortages, but it probably means that we won’t see a US/Mexico tortilla war, fighting for the future of the global corn crop.

But the bigger global agricultural picture is much uglier, at least in the long term, if you follow the work of economist William Cline. Like many of the economists I find most interesting, Cline is based at the Center for Global Development, an excellent development thinktank in Washington, DC. Cline’s recent work focuses on the impact of climate change on global agriculture.

Cline looks at some widely accepted climate models that project increasing concentration of CO2 in the atmosphere and resulting changes in temperature and precipitation. He then projects the agricultural yield of farm land throughout the world in 2080 assuming the predicted climate changes. The result is a decrease in agricultural productivity around the world of 10-25%. This effect is much, much sharper in equatorial nations – he projects a 27% decrease in productivity in Sub-Saharan Africa as a whole, and drops of 38% in India and 35% in Mexico.

Map of the impact of climate change in 2080 on agricultural productivity. Red spaces are adversely affected, green and blue are positively affected. From Cline’s PDF presentation on the CGD website.

Climate change might not be entirely bad news for agriculture. Since plants process CO2 to produce energy, more CO2 might mean more plant growth. Cline argues that the affects of “carbon fertilization” haven’t been as dramatic in the real world as they have been in the labs, but produced an additional set of numbers that calculate in the possible benefits of increased atmospheric CO2. What’s interesting is that the results show more clearly the separation between winners and losers: Russia, Canada, the US and parts of Europe become much more agriculturally productive, while most of the developing world loses.

Map of the impact of climate change in 2080 on agricultural productivity, allowing for carbon fertilization effects. Red spaces are adversely affected, green and blue are positively affected. From Cline’s PDF presentation on the CGD website.

It’s tempting to attribute projected effects like this one to sophisticated international conspiracies, where North Dakota land barons are rubbing their hands in anticipation of being able to grow crops beyond winter wheat and potatoes. But it’s a great example of how climate change is likely to most affect those who’ve had little to do with causing it.

The seminal example in this case is Tuvalu, the world’s second smallest nation, which is literally drowning as ocean levels rise in the Pacific. Much of the island is less than a meter above sea level, and with sea levels rising at 5.5mm a year, it’s quite possible that the atoll will be uninhabitable in the forseeable future. (The collapse of ice shelves in Antartica and Canada suggests that this rise may be more sudden and dramatic, not just a gradual rise in sea levels.)

As Tuvalans resettle in New Zealand, a debate is brewing over whether they should seek status as “environmental refugees” – a status that would imply obligations to other governments to shelter and resettle people fleeing climate change – or whether it’s more important to fight the larger battle against global warming and attempt to preserve the existence of Tuvalu. In an excellent article on Salon by Alexandra Berzon, she points out that the nation sold one of their few national assets – the .tv domain name – for $50 million and spent much of that money buying a seat at the UN so they could lobby for action on climate change. (Wikipedia suggests that Tuvalu still holds a 20% stake in the company that markets .tv and receives regular payments from its use.)

Even with a few million a year in dot.com dollars, it’s hard for Tuvalu to prevail in a battle about global warming – it’s a deeply asymmetric struggle against power companies, auto manufacturers and enormous governments unable to committ to even modest reductions in carbon emissions. Similarly, it’s going to be difficult for Senegal – predicted to lose 52% of its agricultural productivity by 2080 – to challenge the US and China in court to sue for lost crops.

Tuvalu has threatened to sue the US and Australia in the International Court of Justice – there was a flurry of stories on the topic in 2002, but I haven’t seen evidence that a suit was filed. However, using international institutions to take up asymmetric battles is an interesting strategy, one that may be seeing some early success.

Antigua is currently battling the United States at the WTO over online gambling. Online gambling, which is Antigua’s second-largest industry after tourism, is largely prohibited in the US. The US has asked sites to block access to American users by geolocating and blocking IP addresses, and recent legislation prevents US banks and credit card issuers from processing payments to overseas gambling sites. The WTO determined that this behavior constitues unfair trade practice and is preparing to allow Antigua to sanction the US.

Since raising import duties on US goods in Antigua is hardly likely to damage the US economy, the WTO is considering a novel solution of hitting the US where it hurts: intellectual property. Under a proposal under consideration at the WTO, Antigua would be allowed to violate US intellectual property rights by selling legal pirated copies of US books, movies and software, giving the tiny nation (70,000 people, $870m GDP) an effective trade sanction against the US. Predictably, copyright holders are now lobbying the US Trade Representative to back down before their industries are damaged. The result is likely to be that Antigua manages to change US law and get online gambling legalized. (Thanks to Charlie Nesson, who’s been following this issue closely and pointed me towards this story.)

What sort of legal jiujitsu would be required to get the US, China and other nations to cut carbon emissions? It’s hard to imagine, but that’s the sort of thinking that nations are likely to engage in if Cline is right and we’re heading towards a world where it gets easier for developed nations to harvest crops and harder for developing nations.

For further reading: an excellent collection of media stories on Tuvalu and climate change.