Providing food and energy for the future

Report provides new insights into how the world energy and climate system could develop under six different scenarios which look at the world’s power supply

Editor’s note: This post was originally published on Swiss Re’s Open Minds blog. The views expressed in this post do not necessarily reflect or represent the views of ABB or its employees.

There has been a lot of discussion around feeding and powering the population of 9 billion expected by 2050. Meeting this objective is highly complex and fraught with risk, especially when we consider that most of this population growth will be in emerging markets, primarily in the big cities.

Do we have enough farmers to produce food? Will the food be produced where it is needed? Can the growing energy demand be met in a sustainable way? The prospect of sustaining the future population raises many questions, but what is certain is that meeting these future demands will require a fundamental change in the way we produce and consume food and energy.

To increase productivity, farmers need to have access to production credits. Farmers in rural and developing areas specifically face constraints in terms of having the cash available to fund required purchases up-front that will only produce income later, once the crop can be sold. Farmers who don’t have access to loans as collateral pledge away the potential payout of a crop insurance, thus facing debilitating difficulties if the growing season is unproductive or if adverse weather hits.

Sustainable energy consumption can only be achieved by improving energy efficiency and switching to low-carbon options, including renewable energy sources. As investment in these new technologies increases, so will the demand for improved risk management and insurance. And in order to achieve global development goals for renewable energy, tens of billions of dollars are required. But funding isn’t easily available, as the primary investors (private equity and utilities) don’t have this much cash to pay for all of the new assets. Here, “de-risking” (through insurance) of planned assets can unlock debt investments from institutional investors such as pension funds and insurance companies. These players need to get involved in order to make the needed changes in the energy industry.

This Swiss Re report provides new insights into how the world energy and climate system could develop under six different scenarios which look at the world’s power supply mix in 2050. It highlights investment potential and risks which, if adequately addressed, could lead to cleaner growth and create long-term win-win situations both for our climate and our economy.

At last year’s WEF meeting in Davos, Swiss Re held a lunch debate, “Powering a clean energy future,” during which panelists highlighted opportunities for growth, and possible pitfalls, on the path to renewable energy. Participants concluded that unlocking additional financial resources was necessary, as well as a long-term vision on policy and incentive structures to remove regulatory uncertainty. Read more about the event here and watch the embedded video for the event highlights:

What do you think? How can we best use the tools at hand to prepare for the massive population growth in developing cities?

Image credit: JamesWatkins under a cc license via Flickr