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Brown, Lester R.; And OthersState of the World, 1984: A Worldwatch InstituteReport on Progress toward a Sustainable Society.First Edition.Worldwatch Inst., Washington, D.C.ISBN-0-393-30176-1'84268p.W. W. Norton and Company, Inc., 500 Fifth Ave., NewYork, NY 10110 ($15.95).Viewpoints (120) -- Books (010)

MF01 Plus Postage. PC Not Available from EDRS.Conservation (Environment); Depleted Resources;Developed Nations; Developing Nations; EcOnomici;Evaluation; Food; Forestry; Fuel Consumption; Fuels;.*Futures (of Society); Global Approach; International,Cooperation; International Relations; NaturalResources; Paicy Formation; Recycling; ResourceAllocation; Resources; Soil Conservation; Wastes;*World Affairs; *World Pkoblems

ABSTRACTThe first of a series of annual reports for policy

makers, this publication focuses on evaluating changes in theinterplay, between the world's changing.respurce base and the economicsystem. Following an overview, content is divided into 10 additionalchapters covering population stabilization, the world's dependence onoil, soil conservation, forest protection, materials recycling, theeconomics of nuclear power, the development of renewable energy, thefuture of the automobile, the world food supply, and economic policyformulation. Each chapter is edited by a specialist in the-field andcontains several a:ticles by different authors. Examples of subtOpicsconsidered within each chapter are: zero population growth andnational fertility declines (population stabilization); petroleumsubstitutes and government regulations (bil dependence); acid rainand deforestation (forest conservation); waste paper, aluminum, iron,and steel (recycling efforts); wind,, solar, and geothermal energy(renewable energy); and national priorities and "guns or butter"(economic policy formulation). A list of tables and figures,footnotes, and an index are included. (LP)

************************************************************************ Reproductions supplied by EDRS are the best that can be made *,* from the original document. ************************************************************************

cf, STATE OF THE:s.1?). WORLD.2, 1984

A Worldwat,h Institute Report on

Progress Toward a Sustainable Society

PROJECT DIRECTOR

Lester R. Brown

PROJECTPROJECT ASSISTANT

Edward Wolf,... EDITOR

Linda StarkeSENIOR RESEARCHERS

Lester R. BrownWilliam U ChandlerChristopher Flavin

Sandra Pastel

ft

U.S. DEPARTMENT OF EDUCATION

NATIONAL INSTITUTE OF EDUCATION

EDUCATIONAL RESOURCES INFORMATION

CENTER (ERIC)

TM document has been reproduced as

received from the person or orgamtoton

t901.1bng ItMinor changes have been made to improveP

lePa:ductron qualuy

Potnts °Iv** or own** mated la tisTdocik

mess do sot (womanly represenaotticra/NIE

posmon Of policy

"PERMISSION TO REPRODUCE THIS

MATERIAL IN MICROFICHE ONLY

HAS BEEN GRANTED BYr

TO THE EDUCATIONAL RESOURCES

INFORMATION CENTER (E,RIC)."

-..W.WNORTON & COMPANYNEW YORK LONDON

1

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)

Copyright @ 1984 by Worldwatch InstituteALL RIGHTS RESERVED

Published simultaneously in Canada by Stoddart PublishingPRINTED IN TUE UNITED STATES OF AMERICA

The text alibis book is composed in Baskerville. withdisplay type set in Casion. Composition and

manufacturing by The Haddon Craftsmen, Inc.-

FIRST EDITION

Library of Congress Cataloging in Publication DataBrown, Lester Russell, 1939 -

State of the World -1981.

Includes index.Contents: Overview / by Lester R. BrownStabilizing

population / by Lester R. BrownReducing dependence onoil / by Lester R. Brown [etc.]i 1. Economic history-1971- Addresses, essays,

lectures. 2. Economic policyAddresses, essays, lec-tures. I. Title.HC59.8766 1984 338,9 83-25123

ISBN 0-393-0183S-0

ISBN 17= 393-30171-1 PBK.

W. W. Norton & Company, Inc., 500 Fifth Avenue. New York, N. Y. 10110W.. W. Norton & Company Ltd., 37 Great Russell Street. London WCIB 3NU

N.

is

1 2 3 4 5 6 7 8 9 0

'3 .

WORLDWATCI I INSTITUTE BOARD OF DIRECTORS

Orville L. Freeman, ChairmanUNITEDSTNCES---- , - -

Andrew E. Rice. Vice ChairmanUNITED STATES

Lester R. Brown (Ex Officio)UNITED STATES

Charles M. CargilleONITED STATES

Carlo M. CipollaITALY

Edward S. CornishUNITED STATES

Mi IMMO) ul Iii lqPAKISTAN

Hazel Henderson------UNITED_STATES ., - -

Anne-Marie HolensteinSWITZERLAND

Abd -Ei Rahman KhaneALGERIA

Larry MinearUNI'l ED siwnis

Walter Orr RobertsUNITED STATES

Rafael M. Sala:.11111LIPPINES

Lynne G. StittUNITED STATES

11 'OR INSTITUTE STAFF

Brian BrownLester R. BrownWilliam U. ChandlerChristopher FlavinBlondeen GravelySusan Hill

OFFICERS

Lester R. BrownPRESIDENT

Fax GOMMTREASURER

Marianne HunterJodi JohnsonDavid MacgregorSandra Poste!Eduard Wolf

Blondeeti GravelyVICE PRESIDENT

Timothy AtkeSOOGENERAL COUNSEL

1

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Contents

List of Tables and Figures

Acknowledgments xiii

Foreword xv

1 Overview, by Lester R. Brown 1

GOOD NEWS, BAD NEWSTHE CHANGING ECONOMIC PROSPECTTIIE SHRINKING RESOURCE BASEENERGY-RELATED STRUCTURAL

, ADJUSTMENTS

LIVING BEYOND OUR MEANSTHE DEBT OVERHANG

ix 4 Conserving Soils, by Lester R. Brown53

2 Stabilizing Population, by Lester R.Brown 20

POPULATION ARITHMETICCOUNTRIES WITH ZERO POPULATION

, GROWTH

RAPID NATIONAL FERTILITY DECLINESPOPULATION VERSUS ECONOMIC

GROWTH .

POPULATION /RESOURCE PROJECTIONSNEW POPULATION INITIATIVES

3 Reducing Dependence on Oil, by

Lester it Brown 35 .

SUCCESS STORIES

THE CONSERVATION CONTRIBUTIONPETROLEUM SUBSTITUTES

THE ROLE OF PRICEGOVERNMENT REGULATION AND

INCENTIVESTHE OIL INTENSITY OF ECONOMIC

ACTIVITYTHE OIL PROSPECT

. ..

THE CAUSES Gr SOIL EROSIONDIMENSIONS OF TIIE PROBLEMTHE EROSION OF PRODUCTIVITYEROSION'S INDIRECT COSTSTHE ECONOMICS OF CONSERVING SOILTHE GOVERNMENTAL ROLETHE GLOBAL BALA/ICE SHEET

5 Protecting Forests, by Sandra Poskl74

THE FORCES BEHIND DEFORESTATIONACID RAIN: AN E1WEEGING THREATECONOMIC EFFECTS OF DEFORESTATIONLESSONS FROM RECENT INITIATIVESTHE PROSPECTS FOR SUSTAINABILITY

6 Recycling Materials, by William U.Chandler 95

THL VIRTUE OF NECESSITYWASTE PAPER

RECOVERING ALUMINUMIRON AND STEELSTEPS TO A RECYCLING SOCIETY

7 Reassessing the Economics of NuclearPower, by Christopher Flavin115

THE SELLING OF NUCLEAR POWERCOUNTING COSTSA U.S. FINANCIAL MELTDOWNTHE OUTLOOK IN OTHER INDUSTRIAL

COUNTRIESNUCLEAR PO% 'ER IN THE THIRD WORLD'NUCLEAR POWER'S FUTURE

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(vni) Contents

8 Developing Renewable Energy, by

Christopher Ravin and Sandra Pastel136

FARMING THE WINDTILE RESORGENCE OF WOODGEOTHERMAL ENERGY DEVELOPMENTELECTRICITY FROM surn.totrrENCOURAGING DEVELOPMENTS

9 Reconsidering the Automobile's Fu-ture. by Lester R. Brown 157

THE AGE OF THE AtrroNtoanzTHE DECLINE IN PRODUCTIONEFFECTS OF TIIL PRODUCTION DECLINEFUEL EFFICIENCY GAINSALTERNATIVE FUEL. PROSPECTSA TIME OF REASSESSMENT

10 Securing Food Supplies, by Lester R.Brown 175

THE GLOBAL. LOSS OF MOMENTUMTHE POPULATION/LAND/FERTIEIZER

LINK

6

REAL PRODUCTION TRENDSDEPENDENCE ON NORTH AMERICAFOOD SECURITY INDICATOPSA CRISIS OF MANY DIMENSIONS

11 Reshaping Economic Policies, by

Lester R. Brown 194

A REVISED ACCOUNTING SYSTEMNEW ECONOMIC INDICATORSECONOMIC POLICIES FOR FULL

EMPLOYMENTEQUITY AND STABILITYNOW GUNS OR BUTTERPRIORITIES: BACK TO THE DRAWING

BOARD

Notes 210Index 240

List of Tables and Figures,

Chapter 1. Overview

1-1 Oil Intensity of World Economic Output. 1950-83 (in 1980 dollars) 31-2 World Population Growth, 1970 and 1983 51-3 Basic World Economic Indicators, at Three Oil Price Levels, 1950-43 (in 1980

dollars) 71-4 World Depletion of Oil and Topsoil, 1983 91-5 The International Terms of Trade Between Wheat and Oil, 1950-83 "11

1-6 United States: Gross Federal Debt, Total and Per Person, 1950-84 151-7 Interest Payments on External Debt in Relation to Export Earnings of Major

Debtor Countries, 1983 171-8 World Economic and Population Growth at Three Oil Price Levels. 1950-8,3

18

Chapter 2. Stabilizing Population

2-1 Relationship of Population Growth Per Year and Per Century 212-2 Principal Sources of World Population Growth, by Country, 1983 222-3 Countries with Zero Population Growth, 1983 232-4 Thailand: Share of Married Women Practicing Contraception, 1970-81 252-5 Countries Experiencing a Decline in Per Capita Income, 1970-79 28

Chapter 3. Reducing Dependence on Oil -

3-1 World Oil Consumption. Total and Per Capita, 1950-83 363.2 Petroleum Consumption in Major Countries, 1960-82 3730 Fuel Efficiency in New Automobiles in Selected Industrial Countries, 1978 and

Targets for 1985 393-4 Kerosene Prices in Selected Third World Cities. 1981 423 -5 Brazil: Alcohol Share of Auto Fuel Consumption, 1970-82 433-6 ,World Price of Petroleum, Current and Constant Dollars, 1951-83 ,443-7 Gasoline Prices in Selected Commies, July 1981 453.8 Oil Intensity of Gross National Proditct in Major Countries,-1960-82 48

Chapter 4. Conserving Soils 4% .

4-1 Cropping Systems and Soil Erosion 554-2 Sediment Load of Selected Major Rivers 574-3 Observations of Soil Erosion in the Third World 614-4 Estimated Excessive Erosion of Topsoil From World Cropland 624.5 Effcct of Topsoil Loss on Corn Yields 63

0

.4 .' Chapter 5. Protecting Forests "

5-1 Thal Global Forest Resource Base 755-2 Projected Annual Deforestation in Tropical Regions, 1981-85 765-3 Central America: Conversion of Forests to Grazing Land, 1961-78 785-4 Populations Whose Fuelwood Supplies Cannot Be Sustained, 1980, With Pro-

jections for 2000 83 .. .

5-5 Aunual Production of Sawlogs and Veneer Logs in the Tropics, 1961-79 855-6 Projected Tropical Forest Resource Base, 1985 905-7 Establishment of Plantations in the Tropics, 1976-80, With Projections for

1981-85 91 :.

5-8 Per Capita Consumption of Wood Products.in Developing Couturies, 1970 and1980 92 4.

(x) List of Tabks and Figures

4-6 Effect of Topsoil Loss on What Yields 644-7 Increase in Fertilizer Needs for Corn as Soil Erodes, Southern I va4-8 Reduction in Yields of Key Crops as Soil Erodes, Southern Iowa4-9 Siltation Rates in Selected Reservoirs 66 ,

4-10 India: Siltation Rates in Selected Reservoirs 664-11 United States: Conservation Tillage, 1972 -83 68"

6564

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Chapter 6. Recycling Materials. 6-1. United States: Environmental Benefits of Recycling 97

6-2 Paper Use and Waste Paper Recycling, Selected Countries, 1978-80 986-3 Waste Paper Recovery, Selected Countries, 1960 -80 996-4 Aluminum Use and Recycling, Selected Countries, 1981 1046-5 Aluminum Recycling, Selected Countriei, 1954-81 1066-6 United States: States with Beverage Container Deposit Laws 1086-7 Steel Consumptioff-and Scrap Recycling, Selected Countries, 1980-82 110

Chapter '7. Reatsesking the Economics of Nuclear Power7-1 Worldwide Nuclear Power Commitment, sly End of 1983 1187-2 Projections Made in'1970-83 of 1985 Nuclear Generating Capacity in OECD

Countries 1267-3 Estimated Cost of Electricity From New Plants. 1983, With Projections for 1990

On t982 dollars) 134

Chapter 8. Developing Renewable Energy

8-1 California: Commercial Wind Farms Installed, by Location, by End of 1985138 ..

8-2 United States: Selected Plants Outside of Forest Products Industry GeneratingElectricity From Wood 143 .

8:3 Worldwide Geothermal Electrical Generating Capacity, June 1983 1468-4 The Worlds Twelve Largest Photovoltaic Projects, 1983 152

Chapter 9. Reconsidering the Autronobile's Future9-1 World Automobile Fleet, 1950-82 1589.2 World Oil and Automobile Production, 1950-83 160

74 8

-_ --- : -PIN

List of ThbIes and Figures

9,3 United States: Gasoline Service Stations, 1970:-.83 1629-4 United States: Passenger Car Sales by Size, 1970-82 1649-5 Cnited-States:_The Changing New Car. 1975-82 1659-6 Brazil: Esomated Production of Alcohol Fuel From Sugarcane 1970-83, With

Projections to 1985 1679-7 United States: Production of Fut.1 Alcohol From Corn, 1980-84 1689-8 Prevalence of Passenger Cars in the Twenty Most Pr pulous Countries, 1981

170

.. Chapter 10. Securing Food Stipples

10-1 World 011 Price and Grain Produclion TrendsrTotal and Per Capita, 1950-83176

10-2 World Grain Production, Total and Per Capita, 1950-83 17710-3 World Grain Production and Fertilizer Use, 1934-38 to 1979-81 17910-4 "The Changing Pattern of World Grain Trade. 1950-83 18310-5 Soybean Exports. Major Exporting Countries, 1960-83 18410-6 Ipdia: Grain Stocks. 1963-83 18610-7 Index of World Food S'ecuriiy, 1960-83 18748 Countries Experiencing Famine Since 1950 18810-9 World Soil Resources and Excessive Soil Loss, 1980. With Projections to 2000

19010-10 United States: Concessional Grain Exports Under Public Law 480, 1955-82

19110-11 Allocation Of World Food Programme Emergency Relief, 1963-82 192

Chapter 11, Reshaping Economic Policies

11-1 Income Distribution, Selected Countries 20211-2 World Military Expenditures, 1973-83 (in 1980 dollars) 20511-3 Estimated Diversion of World Resources (0 Military Use, 1980 206

LIST OF FIGURES

Chapter 1. Overview

1-1 World Exports. 1951-83 18

Chapter 2. Stabilizing Population

2-1 Cuba's Cnide Birth Rate, 1950 -82 26

Chapter 3. Reducing Dependence on Oil

3-1 U.S. Residencial and Commercial Use of Petroleum. 19:2-82 393-2 Petroleum Used by U.S. Electrical Utilities, 1950-82 41

... 3-3 Oil Intensity of World Economic Output, 1950-83 493-4 U.S. and Soviet Oil Production, 1950-83 503-5 World Oil Production Per Person. 1950-83, With Projections to 2000 51

Ws) List of Tables and Figures

Chapter 5. Protecting Forests

5-1 Saw log and Veneer Log Exports, Philippines and Indonesia. 1964-81 86

Chapter 6. Recycling Materials

6-1 World Aluminum Scrap Use, 1955-81 1056-2 U.S. Iron and Steel Scrap Use (as a Percent of Scrap Generated). 1960-82,_

110

Chapter 7. Reassessing the Economics of Nuclear Power

7-1 Average Generating.Costsfor New U.S. Power Plants, 1983 1207-2 U.S. Nuclear Power Coininitment, 1965-83 1237-3 Expenditures by U.S. Utilities for New Generating Plants, 1970-83 124

Chapter 8. Developing Renewable Energy

8-1. U.S. Residential Wood Use (in Equivalent Barriks of Oil), 1965-81 1428-2 Use of Oil and Wood for Home Heating in Vertits*, 1960181 1428-3 Electricity Generated at World's Largest Geothermal Project, The Geysers,

California, 1060-83 1478-4 Animal World Shipments of Photovoltaic Cells, 1975-83 1508-5 Average Market Prices of Photovoltaic Modules.-1975-83 151

Chapter 9. Reconsidering the Autotnobile's Future g A

9-1 Passenget Car Registrations, United States and Rest of World, 1950-82 1599 -2 World Production of Passenger Cars, 1950-83 1590-3 Production of Passenger Cars, United States and Japan, 1950-83 161

9 -4 Consumption of Gasoline by U.S. Passenger Cars, 1950-82 1629-5 U.S. Automobile Fuel Efficiency, 1950-85 l639-6 Automobile Registrations, Sweden and Denmark, 1965-82 1729-7 Motor Vehille Production in Pen:, 1965 -81 173

Chapter 10. Securing Food'Supplies

10-1 World Fertilizer Use and Grain Area Per Person. 1950-83 17810-2 U.S. Farm Income, Gross and Net, 192,i0-83 18110-3 U.S. Farm Debt and Net Farm income, 1950-83 18210-4 Grain Production Per Person in Africa, 1950-83 192

Acknowledgments

The idea of a progress report first sur-faced in a discussion with Larry Rocke-feller, a trustee of the Rockefeller Broth-ers Fund, as we were casting about forprojects that could "make a difference."As we considered this particular possi-bility. it became more and more appeal-ing, consistent with the interests of theFund and a logical outgrowth of the In-stitute's research program.

Qbtaining funding for new projectsthese days is never easy but in this casethe task was simplified by the willingnessof Rockefeller Brothers Fund PresidentWilliam Dietel, who was instrumental inthe Institute's establishment severalyears ago, to lead the fundraising effort.This relieved me of the duties that sooften absorb a project director's timeduiing the start-up period, enabling meto concentrate on producing this first an-nual edition of the report. Early commit-ments from the Rockefeller BrothersFund, the Winthrop Rockefeller Trust,'and David Rockefeller, meant the pro-ject could be launched even while thefundraising effort continued.

In addition to specific project funding,the report draws on ongoing Instituteresearch that is supported by severalfoundations, including the Geraldine R.Dodge, George W. Gund, William andFlora Hewlett, W. Alton Jones, EdnaMcConnell Clark, Andrew W._ Mellon,and Edward John Noble Foundations,and the United Nations Fund for Popula-tion Activities.

The personal interest of several 'key

people in the project 4facilitated itslaunching. Prominent among these wereOrville Freeman and Andrew Rice,chairinan and vice chairman respectivelyof the Worldwatch-Board of Directors,who enthusiastically supported the Stateof the World-1984 from the beginning.Besides William Dietel. two other foun-dation representatives, Scott McVay ofthe Dodge Foundation and Anne FirthMurray of the Hewlett Foundation,strongly endorsed the concept of such areport. And finally, the personal interestof George Brockway. board chairman ofW.W. Norton, facilitated speedy publi-cation.

Edward Wolf worked' closely with meas project assistant from the time theproject was launched until the manu-script went to the publisher. Ted helpedwith research, served as a testing groundfor new ideas, and reviewed early chap-ter drafts. His many skills and commit-ment to the project made it immeasur-ably easier for me. Authors and readersalike are indebted to Linda Starke, whowas for many years editor of the World-watch Papers, for bringing her excep-tional editorial skills to bear on the proj-ect. As production coordinator, Lindaalso worried about such things as design,layout, and proofreading.

bozens of outside reviewers havehelped us strengthen individual chaptersand refine our overall objective. Gerald0. Barney and Erik Eckholm reviewedthe entire manuscript at short notice,and the final copy owes much to their

1

(xw) Acknowledgments

comments. hc following people re-viewed individual chapters or genet-,ously shared their knowledge and exper-tise: Norman Berg, C. Fred Bergsten,Leon Bouvier, Ken Cook, RichardCurry. Herschel Cutler, Derrell Dc Passe,Harold Dregnc, J. Rodney Edwards,Martin Enowitz. Scott Fenn, Gail Fin-stcrbush, Kathleen Gray, -Tom Gray,Holly L. Gwin, Maureen Hinkle. HowardHjort. Robert Johnson. Charles Koma-noff, George Ledec, Amory Lovins, PaulMaycock, Sandie Nelson, Philip Patter-son, AndrewRice, Ross Pumfrcy, Rich-ard Rosen, R. Neil Sampson, AlfredoSfeir- Younis, and Edward Sullivan.

None of our debts is greater than thatto the Worldwatch Institute staff. whosededication and efficiency did much tosmooth the rough spots on the road toproduction. Linda Doherty and SusanHill handled the bulk of the typing andwrestled cheerfully with the countlessidiosyncracies of a new word proc,:ssing.system. Marianne Hunter pitched in toe,ase the sudden crunch of last-minutetyping and helped proofread the manu-script at a critical stage. Brian Brown andJodi Johnson jqined us jut when extrahands were neided and ktpt the officefunctioning normally. John Foggic as-

1

sistcd the research for the nuclear encrgy chapter and helped draft some earlysections of the renewable energy chap-ter, while Paige Tolbert laid the ground-work for the geothermal section before.the report was even begun. From NewYork. Milcna P. Roos used her intimateknowledge of the United Nations systemto gather research documents, some ofthem unpublished, for several chapters.

Ile administrative skills of BlondeenGravely, Felix Correll, and Marge Hub-bard helped maintain, an exceptionallystable work environment for the re-search staff. David Macgregor managedto maintain the, flow -of Worldwatch Pa-pers despite all the extra activity as-sociated with the report's completion.

We extend special thanks to visitors tothe Institute, among them Gary Hirsh-berg of the New Alchemy Institute;Amory and Hunter Lovins of the RockyMountain Institute; Helena Norberg-Hodge of the Ladakh Project; and B.B.Vohra, Director of the Ministry of Envi-ronment in I :dia. In relating their ex-periences they conveyed an enthusiasmand commitment, which assured us notonly that change is possible, but that it isalready well under way.

Lester R. Browns

12

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a

Foreword

This is the Worldwatch Institute's firstState of the World report. The intent isnot merely to describe how things areabut to indicate whether they are gettingbetter or worse. The yardstick by whichwe measure progress is sustainabilitythe extent to which our economic andsocial systems are successfully adjustingto changes in the underlying natural re-source base.

The primary focus in State of the World--1984 is on the interplay between thechanging resource base and the eco-nomic system. Recent concern with thisrelationship was heightened by publica-tion of The Limits to Growth in 1972 anddramatically underlined the followingyear by the OPEC oil price hike. Thereturn of famine during the early seven-ties after nearly a quarter-century's ab-sence raised questions about long-termfood security. These and other issues ledthe U.S. Government to undertake astudy of global resource issues facing thecountry as it approaches the twenty-firstcentury, which culminated in The Global2000 Report to the President, published in1980.

In an effort to regularly monitorchanging conditions worldwide, a num-ber of organizations now issue annualreports. The International MonetaryFund, for example, publishes a WorldEconomic Outlook. The World Bank pro-duces the World Development Report, anannual review ofeconomic conditions indeveloping countries. Several U.N.agencies compile yearly reports in their

*I

special ireas of responsibility, such asUNICEF'S State of the litorld's Children.The United Nations Environment Pro-gramme publishes a state of the environ-ment report. The Food and Agricultu eOrganization has been publishing formany years a State of Food and Agriculturean the U.N. Fund for Population Activi-ties issues an annual report on popula-tion.

At the national level, some, govern-mentsjapan and Israel, for exampleissue annual "state of the environment"reports. In the United States, the Con-servation Foundation last year put outState of the Environment-1982 in an effortto supplement the diminishing efforts ofthe U.S. Council on EnvironmentalQuality. Half-a-world away this was par-alleled by The State of India's Environment1982, prepared by the Centre for Sci-ence and Environment in New Delhi.Within the U.S. Government, the De-partment of Energy issues an Interna-tional Energy Annual and the Departmentof Agriculture maintains a steady flow ofreports tn the world food situation.

Woridwatch's contribution to thisgrowing dialogue is an attempt to ana-lyze not only the major developmentsand trends in these specific areas butalso the way they relate to each other.The canvas on which this report issketched is necessarily broad. Its pur-pose is not to replace any of the moredetailed reports, but rather to supple-

_ ment them and perhaps even to enhancetheir usefulness by integrating their

13

i

(lan) Foreword

findings in a broader_analysis. We try todetermine, for example, how the deple-tion of oil reserves affects the globaleconomy, both directly and indirectly.How will the shift from oil to renewableenergy alter global economic structures?How does population growth affect soilerosion and what effect will erosion haveon food production? Will populationgrowth eventually be slowed by fallingbirth rates or by iising death rates?These questions may not yet be at thetop of national political agendas, but webelieve they are issues that will shape theuman prospect.The State of the World-1984 tries to

measure progress toward sustainabilityand determine why some countries aredoing better on a given front than oth-ers. Is progress due to the play of marketforces, tax incentives, public education,government regulation, the emergenceof a new technology, or intelligent lead-ership? We try to convey what is workingar.d 4;hy. We see the report as a vehiclefor quickly disseminating news of inno-vative initiativeswhether it be Swe-den's national plan to use reverse vend-ing machines to recycle aluminumbeverage containers, Thailand's innova-tive family planning incentives, or Cali-Ibritia's policies to spur a massive break-through in wind electrical generation.

The State of the World will not cover thesame topics each year but rather will dealwith the shifting constellation of issuesthat relate to sustainability. This year,for example, we have analyzed world-wide soil erosion; next year we may focuson the conversion of cropland to non-farm uses. This year we have a detailedanalysis of deforestation and the varioustree planting efforts that are under way.We may focus next on the condition ofthe world's grasslands, a major source ofprotein in the human diet. This year'schapter on renewable energy examineswind power, firewood, geothermal en-ergy, and photovoltaics. In the 1985 re-

port, we anticipate covering hydro-power, solar collectors, alcohol fuels,and methane generation from biologicalwastes.

In general, this first assessment showsthat existing priorities in the use of bothfiscal and natural resources are not com-patible with the long-term sustainabilityof society. A resumption of the broad-based improvements in the hutnan con-dition that characterized the third quar-ter of this century will require a shift indevelopment strategies and a reorderingof priorities. A major purpose of this re-port is to provide a sense of that neededreordering and of new ways to evaluateimprovements in the human prospect.

We have tried to design a report thatwill be useful to policymakers. For exam-ple, in analyzing energy trends we havesought to help national energy plannerswho are faced with difficult choices. The

-chapter on nuclear power economics isthe most comprehensive internationalcompilation currently available on thecosts of nuclear power. Unfortunately,few energy planners have had access tothese international cost data. The dtap-ter that charts the reduced dependenceon oil worldwide enables national en-ergy officials to compare their progresswith that in other countries.

One by-product of global assessmentsof this sort is the identification of basicinformation gaps. Our effort to analyzetopsoil loss from erosion indicates thatfew countries have systematically gath-ered data on soil formation and loss ontheir croplands. Although soil is a basicresource, most countries lack the dataneeded for its intelligent management.

The analysis underlying the report isintegrated, or what is sometimes de-scribed as interdisciplinary. We haveconsciously chosen not to consider is-sues exclusively in biological, economic,political, or other disciplinary frame-works. Rather, we attempt to examineissues in all their complexity, much as

. 14

Foreword

policyntakers nuts' consider them. Any-one who has attempted to combine eta-Itigic and economic analysis understandsthe difficulties inherent in interdiscipli-nary research. Even the starting assump-tions of the two disciplines conflict.Where ecologists see specialization as arisk, economists are inclined to see it asa virtue. Ecologists see the world interms of cycles, such as hydrological andcarbon cycles; economists are morelikely to see it in terms of continuousexponential growth. Ecologists seek ayield that can be sustained over the longterm; economists are more interested inmaximizing short-term profits.

Given these differing frames of refiT-ence, the stumbling blocks in integratedresearch are obvious. Confining re-search on an issue 40 a particular disci-pline is obviously much more comforta-ble. Ecologists can wrap themselves inthe principles of ecology and economistsbare their economic theories, but inter-disciplinary researchers lack such a secu-rity blanket. They can selectively drawon theory from various disciplines. butwhen the theories do not mesh theymust rely on judginent and occasionallyeven on intuition.

The tone of this report is not intendedto be optimistic or pessimistic. Neitherunfounded optimism nor undue pessi-mism provide a solid foundation forpolicymaking. Only realism will do.

I I IWith this proj,t. Worldwatch is re-

sponding further to a strong worldwidedemand for policy-oriented interdisci-plinary research, a demand that is re-flected in sales of the 67 studies-57Worldwatch Papers and 10 booksthatthe Institute has published during itsfirst several years. For the first six World-watch books, where arrangements forforeign language editions have beenlargely completed. 74 publishing con-

lXV11)

tracts have been signed in some 24 lan-guages. For seventh Worldwatch Papersthe number of copies its print in all lan-guages combined has passed the hun-dred thousand mark.

Sales of Worldwatch Papers and book)yalties have helped put the Institute. a

,:,,stprofit research organization, in theunusual position °learning a large shareof its financial support. Indeed, theseearnings and the interest on qVningssaved, which now account for neSrly h:11of the Institute's budget, have providedsonic of the funding for this project.

The launching of this global assess-ment represents a natural evolution ofthe Institute's ongoing research pro-gram on energy, environment, food,population, and other global issues. Inundertaking this progress report, the In-stitute has relied on Its existing informa-tion-gathering networks, including pub-lication exchanges with some 70 otherresearch institutes around the world,and an extensive international networkof contacts in agriculture, business.demography, economics. energy. envi-ronment, and science. The Institute hasalso taken advantage of its location inWashington, D.C., to tap the informa-tion sources of the U.S. Government,World Bank, International MonetaryFund. local universities, and other re-search organizations.

Since this is our first State of the World,we welcome suggestions on how to makesucceeding editions more useful. Com-ments and queries may be directed ei-ther to me or to the authors of individualchapters.

Lester R. BrownWorldwatch Institute1776 Massachusetts Avenue, N.W.Washington. D.C. 20056

December 1983

15

STATE OF THEWORLD

1984

16

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1

OverviewLesu4er R. Brown

The news headlines of the eighties de-scribe the worst worldwide economiccrisis in half a century. In many countriesincomes are falling. Record budget defi-cits plague national and local govern-ments on every continent. The externaldebts of several countries in the ThirdWorld and Eas n Europe verge on theunmanageable. Coiporate bankruptciesin major industrial countries are morenumerous than at any time since theGreat Depression. Unemploymentratchets upward in both industrial anddeveloping countries. More countriesare threatened with famine than at anytime in the modern era.

The belated U.S. economic recoveryin 1983 notwithstanding, the worldeconomy is in the worst crisis since theGreat Depression. There are, however,ntajor differences between the thirtiesand the eighties. The crisis of the thirtieswas almost entirely the product of economic mismanagement during the twen-ties, of ill-conceived economic policiesthat fueled an economic boom until itwent out of control. On both sidei of theAtlantic the boom psychology led to

Units of measurement are usually metric unlesscommon usage dictates otherwise. ,r

,

afinancial speculation that eventually cul-minated in the Great Depression. Onceunder way, the Depression seemed tofeed on itself as international trade de-clined and countries turned inward,adopting protectionist policies that fur-ther reduced trade.

Although the economic crisis of theeighties is exacerbated by economic mis-management. its roots lie in the deple-tion of resources, both nonrenewableand renewable. During the fifties andsixties the world economy steadilyboosted its use of oil, a finite resource,putting it on a path that by definition wasnot sustainable over the long run. Thedepletion of oil reserves, and its effecton world oil prices, is the most immedi-ate threat to world economic stability,but the depletion of soil resources byerosion may be the most serious long-term threat. The unprecedented dou-bting of world food supplier over the lastgeneration was achieved in part byadopting agricultural practices that ledto excessive soil erosion, erosion that isdraining the land of its productivity.After a point agriculture can no longerbe sustained-and the land-is-abandoned:

Sustainability is an ecologic conceptwith economic implications. It recog-

17

1x1 Slate of Me World-1984

nines that economic grin% th and humanwell-being depend on the natural re-source base that supports all living sys-tems. Technology has greatly expandedthe earth's human carrying capacity,most obviously with advances in agricul-ture. But while the human ingenuity em-bodied in advancing technology canraise the natural limits on human eco-nomic activity, it cannot entirely removethem. A sustainable society is one thatshapes its economic and social systemsso that natural resources aud life-sup-port systems are maintained. Today westudy the archaeological sites of earliercivilisations that failed to do so, deplet-ing their soils, mismanaging their irriga-tion systems, or otherwise embarking onan nnsusta;nable development path.

I Itamanity's newly acquired capacity toself - destruct with nuclear weapons hasadded another dimension to the conceptof sustainability. Recent research by U.S.and So% iet scientists on the climatic andbiological consequences of nuclear marindicates that a successful preemptivenuclear strike by either superpowerwould lead to a "nuclear winter." theend of civilization and quite possiblythe end of human life on earth. Againstthe backdrop of this new potential forself-destruction, achi%ing sustainabilitypresents unprecedented political andmoral challenges.'

Nuclear weapons are not the only ex-plosive force threatening civilization. Aspopulations have multiplied. their de-mands has e begun to exceed the sustain-able yield of the economy's biologicalsupport systems. In country after coun-try these thresholds have been crossed,leading to consumption of the basic re-sources themselves. Deforestation is re-ducing firewood and lumber supplies,driving up the cost of cooking fuel inThird World villages and the cost ofhousing everywhere. Overhshing andovergrazing have become commonplaceas human claims on these major protein-

producing biological systems have spi-raled.

Today's -conoznic headlines describea world that is finding it difficult to livewithin its means. Eager to maximize out-put loc.:.iy, we are borrowing. from to-morrow, Our economic problems are ofour own making, the product of short-sighted economic policies designed topromote expansion at any cost, of agri-cultural policies designed to boost foodoutput at the expense of soils, and offailed or nonexistent population poli-cies.

In our preoccupation with monthlyeconomic indicators we have lost touchwith the environmental resource base onwhich the economy rests. We keep de-tailed data on the stock of plant andequipment while virtually ignoring thecondition of soils, the health of forests,and the le% el of water tables. Only whenenvironmental deterioration or resourcedepletion translates into economic de-cline do we seem to notice it.

GOOD NEWS,. BAD NEWS

Over the past generation the world hasyielded to an excessive dependence onoil, moved from farming soils to miningthem, and begun, co consume the econ-omy's biological support systems. Inshort, the world economy has movedonto a development path that is unsus-tamable. Although at least some politicalleaders and their economic advisors arevaguely aware of this, the effort to returnto a sustainable development path is notyet well defined. Most national govern-ments, lacking a clearly defined sustain-able development strategy, are attempt-ing to "muddle through." As a result,successes are infrequent, often outnum-bered by failures.

Tile essential components of a sus-

18

...

Overview

tainable, development strategy arestraightforward. They include stabilizingpopulation, reducing dependence onoil, developing renewable energy re-sources, conserving soil, protecting theearth's biological support systems, andrecycling materials. The good news isthat in each case at least a few countriesare making some impressive progress,ptoviding a model for others. The badnews is that in only one area, reducingdependence on oil, is the worldwide per-formance close to adequate.

After several years of h ying to reducedependence on oil, the world finallyturned the corner in 1979. Since then,progress has been 'broadly based, ex-ceeding expectations. Oftentimes histor-ical turning points are tied to a specificevent. With oil, the turning point camein 1979, when OPEC oil prices rosesharply for the second time in six years.After peaking in 1979 at 23.8 billion bar-rels, world oil consumption has fallensharply in each of the four years since,declining some 14 percent.2 .

After three decades of rising oil use, itwas clear by the early seventies that theworld's growing dependence on a dwin-

, dling resource, though convenient, wasnot sustainable. Throughout this periodoil use per unit of output was rising. Be-tween 1950 and 1973 the oil used per$1,000 worth of gross world product(GWP) climbed from 1.33 barrels to2.27 barrels, increasing the oil intensityof economic output by 71 percent. (SeeTable 1-1.).Durihg the seventies the oilused per unit of GWP reached a plateau,but after the second oil price rise of the.seventies it began a steady decline, fall-ing from 2.15 barrels per $1,000 ofproduct in 1979 to 1.74 barrels in 1983,a drop of 19 percent. In this critical areathe world was not only headed in theright direction, but making impressivegains.

Fallowing the 1973 oil price hike en-err/ planners generally assumed that

t

(3)

Table 1-1. Oil Intensity of WorldEconomic Output, 1950 -83 ,

(in 1980 dollars)

Oil UsedPer $1,000

Year of Output

1950

1955

1960

1965

1970197119721973197419751976197719781979

1980198119821983

(barrels)1.33

1.46

1.67

1.90

2.172.212.232.272.132.052.152.162.142.15

2.031.931.861.74

SOURCES: AMerican Petroleum Institute; HerbertR. Block. The Planetary Rodna en 1980 (Washing-ton, D.C.: U.S. Department of State, 198t): andWorldwatch Institute estimates.

the development of nuclear powerwould. surge forward, beginning to 'the void that would be left by oil. But thiswas not to be. In 1970 the Organisationfor Economic Co-operation and Devel-opment (OECD) projected that its mem-bersthe Western industrial countriesplus japanwould have 563,000 'mega-watts of nuclear generating capacity by1985. A 1978 OECD projection foresawa 1985 generating capacity of just 214,-000 megawatts, just over one-third theearlier figt:re. A 1983 Worldwatch pro-jection shows a further reduction. to183,000 megawatts, largely because ofthe cancellation of partially completed

19.3

State of the World-1984

plants. in the United States. where theindustry has been plagued by nightmar-ish cost o% el runs. no new reactors hatebeen ordered since 1976 and some 87reactor orders have been c ant sled. Bar-ring any More new starts. U.S. nuclear'towel ma) peak in the early nineties.The counts) that led the world into theage of nuclear power may well lead itont.3

With nuclear power failing the markettest and with serious ett%ii onmental andmeteorological consequences associatedwith the expanded use of coal. the worldis turning to renewable energy re-sources. Although the development ortent wable energy has not received thegoy ernmetual support it deserves. somein& ideal countries have made spectac-ular gams. In the ,United States. whereforests are %add) underhat%ested or notharvested at ail firewood now suppliestwice as much delivered energy as nu-clear pow er. Public attention focuses-onthe soaring residential use of firewood.which has tripled since 1973. !.et it isexceeded by inthistr)'s use of wood andwood waste as a fuel.'

The country that led the world intothe age of nuclear power may welllead it out.

A dramatic breakthrough in wind elec-trical generation is also occurring in theUnited States. in California. By the endof 1983 an estimated 4.600 wind tur-bines were installed in wind farms. 95percent of them built during the preced-ing 24 months. Their collective genera-ting capacity totals some '300 megawattsof electricity. enough to satisfy the resi-dential electrical needs of some 120.000Cal fornia ns.5

Other renewable energy success sto-ries are scattered around the globe.

Worldwide. over the million homes nowheat water with rooftop solar collectors.As oil prices climbed during the seven-ties, energy-deficit Third World coun-tries, aided by international develop-ment agencies. turned to hydropowerdevelopment with renewed vigor. Bothindustrial and developing countriesdemonstrated an interest in mini-hydrodevelopment. a resourcelargely ignoredduring the era of cheap oil. And in Brazilnearly one-fourth of all automotive fuelused in 1983 came from agriculturallybased fuels, principally alcohol distilledfrom sugarcane.6

If living standards are to be main-tained and improved as energy becomesmore expensive, the systematic recyclingof materials will have to replace thethrowaway economy. Some countries al-ready understand this. For example, theNetherlands and Japan now lead theworld in paper recycling, reusing nearlyhalf the piper they consume. In theUnited Sates, nine states have passedlegislation requiring returnable depositson beverage containers, making it likelythat over 90 percent of these containerswill be returned for recycling and reuse.Worldwide recycling of aluminum hasincreased from 17 percent in 1970 to 28percent in 1981. More important, recy-cling of this energy-intensive metal ap-pears to be poised for sharti gains in theyears ahead?

On the population front, the news hasbeen mixed. After peaking shortly be-fore 1970 at about 1.9 percent per year,world population growth has slowed to1.7 percent in the early eighties. Unfor-tunately this decade-long ebbing of thegrowth rate has not been sufficient toreduce the actual number added. Theannual increase, which was roughly 70million per year in 1970. has now edgedup to 79 million. (See Table 1-2.) Untilthe rate of world population growthslows markedly. improving the humancondition will be difficult.

20

Ovennew

Table 1-2. World Population Growth,1970 and 1983

AnnualRate of Annual

Year Population GI on di .Inct ease

(billion) (percent) (million)1970 :3.68 1.9 701983 4.66 1.7 79

&ono:I.,: Populaiion Itefo owe Bureau, World Pops.(awn Data Sheet (W.hlusigion. D.C. annual).

At the national level, however, somecountries have performed adinirabl).Twelve countries in Europe havebrought population growth to a halt.More importantly, China, home to '22percent of the world's people, has re-duced its population growth to just over1 nercent pet year. comparable to that insome industrial countries. In a near des-perate effortito break the montetittun ofits population growth, China has shiftedfrom birth planning and the adoption ofbirth quotas at the commune or produc-tion-team level to the national goal of aone-child family.8

Elsewhere in the Third World, prog-ress has been uneven. Ibdia, the otherpoptilation giant, appears to be gettingits family planning program back ontrack after several years of neglect, butvaluable time has been lost. Without de-

. cisive action, India's population of 715million is projected to grow by anotherbill' it peopleas many as China nowhas before stabilizing.9

The lack of movement toward sustain-ability in several other key areas is also ofgreat concern. Efforts to protect theworld's forests are not faring well. Eachyear they shrink by an area roughly thesize of Hungary. in the great majority ofThird World countries deforestation is aserious matterone with long-term eco-noinic and ecologic consequences. Onenotable exception to this generalizationiTSouifi Korea. which-has successfullyreforested its once denuded mountains

..

( 51 .

and hills, planting in trees an area two-thirds that in rice, the conittry's food sta-ple Although national successes arerare, there are scores of promising localinitiatives. such as in the Indian state ofGujarat, that must be multiplied manytimes if future firewood needs are to beassured.10

Soil erosion, as mentioned, has nowreached epidemic proportions. But nomajor country. industrial or developing,has responded effectively to this threatto sustainable agriculture. As pressureson the land have intensified over the pastgeneration, erosion has increased untilclose to half the world's cropland is los-ing topsoil at a debilitating rate.' 1 In theUnited States, the crop surpluses of theearly eighties, which are sometimes citedas a sign of a healthy agriculture, are

`partly the product of mining soils.With food security, what little good

news there is has been overshadowed bythe bad. During the early eighties, worldfood reserves increased, climbing totheir highest level in a decade. Unfortu-nately, reserves accumulated for thewrong reasonthe lack of progress inraising the purchasing power and percapita food consumption of the world'spoor. Since 1973, little progress hasbeen made in raising food consumptionper person for the world as a whole.19While North American agricultural out-put surged ahead during the late seven-ties anti early eighties, that in Africa andthe Soviet Union lagged. In Africa fallingper capita food production has, since1970, slowly but steadily dragged thatcontinent into a crisis. Perhaps evenmore disturbing, the forces leading tothis deterioration in Africarapid popu-lation growth, soil erosion, and underin-vcstment in agriculturemay well leadto a decline in per capita food produc-tion in other regions as well, such asnortheastern Brazil, the Andean cotin-tilei,CetitFil America, Indian sub-continent, and the Middle East. -

.

(6)

The widely dispai ate t egional perfor-mances in food production are mirroredin the shift in world grain trade patterns.More and more countries have becomeimporters, increasing their dependenct;on the North American breadbasket. In1982, the United States controlled 55percent of world grain exports; SaudiArabia. by comparison, controlled 32percent of world oil exports. to Thisoverwhelming reliance on one regionfor food leaves the world vulnerable toNorth American climatic variability andpolitically inspired export embargoes.

State of the World-1984

though poorer and hungrier, are betterarmed.

On another key frontthe threat ofnuclear annihilation there was seriousregression. Hard-line posturing by the.to superpowers raised concern overnuclear war to a new high. Many of theestimated 50,000 nuclearweapons, bothstrategic and tactical, are poised forlaunch at the push of a button.16 If everunleashed. this destructive power wouldbring civilizatiqn as we know it to an end.The one encouraging development dinthis front has been the rising level ofpublic awareness, particularly in Europeand the .United States. Public interest

The value of arms imports into theThird World has now climbedabove that of grain imports.

lf the scientific and financial resourcesneeded to put the world economy on asustainable footing in all these areas areto be mobilized, they may have to comeat the expense of the military sector. Butduring the years since 1979. a perioddistinguished by a lack of economicprogress, the militarization o; the worldeconomy has accelerated, almost asthough mounting economic stresseswere causing political leaders to try tooffset these insecurities by spendingmore on weapons. Between 1979 and1983, global military expendituresclimbed from $554 billion to $663 bil-lion (1980 dollars), an increase of one-fifth, and pushed global military expen-ditures to $145 per person.' 4

Not only do many of the world's scien-tists devote their skills to devel pingnew weapons, but political lead s ap-pear to devote more and more of theirtime to military matters. An disap-pointingly, the value of arms importsinto thelltird_31orIcLhas_now.c bedabove that of grain imports. is As a re-sult, many Third World populations,

groups, religious organizations. profes-sional associations, and business groupshave joined hands in an effort to reducethe potential for nuclear annihilation.On balance, perhaps the key gain duringthe early eighties has been this growing,understanding of the many threats to thesustainability of civilization. By this indi-

sator, at least, we are gaining.

THE CHANGING ECONOMICPROSPECT

For most of humanity the century's thirdquarter was a period of unprecedentedprosperity. World output of goods atidservices expanded 5 percent annually,tripling in less than a generation. Rapidgrowth had become commonplace, builtinto the aspirations of consumers, theearnings projections of corporations,And the revenue expectations of govern-ments. Few stopped to calculate thateven a' 4 percent rate of economicgrowth. if continued, would lead to afiftyfold expansion in a century. And

_ even fewer considered the pressures thiswould put on the earth's resources, bothrenewable and nonrenewable.

22

Overview

Cheap energy. spec the ally 'cheap oil,1'Piste literally Elided this record et°

nomic expansion; At less than S2 a bar-. rel. oil was so cheap that now. from the

. perspective of tile late twentieth century,it aPpears to have been almost a freegood. It was not only inexpensive. but itwas versatile and easily transported,: Itcould be used equally well as a fuel forgenerating electricity or powering ma-chinery or as a chemical feedstock.

Cheap oil pushed back_ many of thetraditionai resource constraints -ongrowth. In its various forms it was sub-stituted for scarcer resources. Fertilizertt.is substituted for cropland. kerosenefor firewood. synthetic fibers for naturalones, and. as tractors replaced draft ani-mals, gasoline and diesel fuel for forageand gram. Cheap oil had become a safetywaive, alleviating pressure on less abun-dant resources. But as the price of oilbegan to climb, substitution became

amore costly and the safety tAve began toclose.

The transition to costly oil has affectedworld economic performance both di-rectly, and indirectly. Capital require-ments in the energy sector, especially forthe development of nets energy sources.have shared. draining capital from othersectors. Rising real energy costs have ledto higher wage demands and general in-flation. And realization that the age of

/It.....

energy abundance h ending has damp-ened the outlook for investors and 'con.sumers alike. (See Table I-3.)

Among the sectors most affected bythe changing oil situation is the oil in-dustry itself. a major part of the worldeconomy. As demand fiir oil droppedbecause of high prices. world economicactivity has been reduced by downturnsin oil production. transport, and refin-ing. After increasing by well over 7 per-cent per year frc,m 1950 to 1973, oilpro-duction _dropped to 2 percent per yearbetween 073" and 1979._ After the sec-ond oil price hike of the 'severities`-itbegan to decline. falling sonic 5 percentper year for the next four years.

Rising oil prices have also slowed thegrowth in world grain production.(Other factors slowing the growth hi'food output include soil erosion, watershortages, and diminishing returns onfertilizer use.) Although attention hasfocused on the effects of higher oil priceson food production, the effect of escalat-ing oil prices om,the world economy hasalso weakened the growth in demand forfood. After increasing by 3.1 percent peryear from 1950 to 1973, world grain pro-duction has averaged less than 2 percentper year ever since.

Industries that are even more directlytied to oil have been hit still harder bythe changing oil outlook. Of these none

Table 1-3. Bask World Economic Indicators at Three Oil t rice Levels, 1950-83(in 1980 dollars)

Annual GrowthOil !Nice Oil Grain

Pet sod Per Barrel Pt odtu don ProductionAutomobile Gross WorldProduction Product

(dollars) (percent)

1950-73 2 7.6 31 5.8 5.01973-79 12 2.0 1.9 1.1 3.51979-83 31 -5.`2 1.01 - 3.0 1.7

'Severe drought in North Affirm.' and Africa and a record Idling of cropland under e S farmprograms 'educed the 1983 banes' sell beloo trend.sooct.s: Rated on data from American l'etrolffin . institute. U.S. Department of Agriculture. MotorVehicle Komfacturers Astocmtion. mid U.S. Dep.unitent of Stm.

23

It

,

(81 State of the World-1984

has suffered mote than automobile pro-duction, the world's largest manufactur-ing industry, Between 1950 and 1973world auto production expanded by 5.8percent per year. With oil averaging $12a barrel between 1973 and 1979, thegrowth in auto output slowed markedly,to just over I percent per year. When theworld oil price was pushed over $30 in1979, the slowdown in productiongrowth becatne a decline, with outputfalling from 31 million automobiles in1979 to an estimated 27 million in 1983.Although this fourear slide is obvi-ously not a (rend to be projected to theend of the century, it does suggest thatthe automobile's future is clouded.

The effect of higher oikprices on auto-mobile sales is both direct and indirect.Most immediately, higher fuel prices dis-courage automobile ownership. But tothe extent Shat the changing oil situationtnintilates Into slower economic growth,groilt in the number of potential buy-ers also slows. Although it is analyticallydifficult to separate these two effects,they are combining to alter the automo-bile's future.

A decline in the demand for automo-bile, ripples through the world econ-omy, depressing demand in basic supplyindustries such as steel, rubber. andglass. Companies producing auto partsand machine tools are also adverselyaffected, Downturns in these basic in-dustries have contributed to the eco-nomic growth slowdown in the leadingindustrial societies.

Given the emerging constraints ongrowth, particularly in such basic sectorsas food and energy, the world will havegreat difficulty resuming the rapid eco-nomic growth of the 1950-73 period.High-technology industries such as mi-croelectronics and biotechnology canexpand dramatically, helping to improvethe efficiency of energy use and boostagricultural production, but theirgrowth cannot begin to offset the slower

growth or decline in the basic sectors.Economic growth in the next severalyears, and quite possibly throughout therest of this century, is more likely Jo beslow than rapid, more likely to average 2percent per year than the 4-5 percentthat characterized The century's thirdquarter. -

Assessing future economic prospectsis complicated by the difficulty of sepa-rating the effects on growth of thechanging resource situation, evidencedfor example by the 1979 oil price hike,and the cyclical behavior of the worldeconomy. In short, is the slow growth ofthe 1979-83 period merely a cyclicaldownturn, as some economists argue, oris it the early stage ea transition to afuture when economic growth will bemuch slower? .The analysis underlyingthis report, which assesses the effects ofa broad range of resource constraints onworld economic growth, indicates it isthe latter.

THE SHRINKING RESOURCEBASE

Of all the resources that are being de-pleted, losses of oil and topsoil pose thegreatest threats to economic progressand stability. With reserves of bothbeing steadily depleted, the world is fac-

tjng major economic adjustments that, at' a minimum, will extend over several

decades, . JOil reserves are commonly measured

at two levels, those that are proven andthe larger. less precise category of thosethat are ultimately recoverable. Provenreserves have been physically verifiedand can be extracted profitably at current prices, relying largely on naturalpressure in the oil-bearing structures.

24'WillP'

Ottriview

Ultimately recoverable reserves includenot only an estimate &any additional oillikely to be discovered, but also any re-serves that can he extracted using themore expensive secondary and tertiary

-.recovery techniques, which, rely on theuse of pressure and solyents. Extractingall the estimated 2.1 trillion barrels ofultimately recoverable oil would requireprices well above current ;leve1s.17

By the late seventies annual world oilconsumption was just under 23 billionbarrels per year, nearly 3 percent ofproven reserves of 670 billion barrels. Itwas this wholesale depletion of reservesthat helped convert the world oil econ-otny from a buyer's to a seller's market

xi:almost overnight. M the 1983 oil pro-duction level of 18 billion barrels,proven reserves of oil would lait 37years. (See Table 1-4.) Applying thissame rite to the ultimately recoverablereserves would stretch production out to114 years, obviously a preferable timespan.

As (he detnand for food has climbedwith each passing year, the world hasbegun _to mine its soils, converting theminto a nonrenewable resource. Even inan agriculturally sophisticated countrylike the United States, the loss of soilthrough erosion exceeds new soil forma-tion on over one-third of the cropland.isAssuming there is still on average seveninches of topsoil on the world's crop-

tesource

0.

( 9 )

land, there are sonic 3.5 trillion tons oftopsoil that can be used to produce food,If erosion on cropland exceeds new soilformation by 23 billion tons per year(the rate that is calculated in Chapter 4),topsoil reserves -will disappear in about150 years, only a few decades after theexhaustion of ultimately recoverable re-serves of oil.

There are however, important differ-ences in the ways these two basic re-sources are being depleted. For exam-ple, it is reasonable to expect thatessentially all the world's oil reserve. 3 willone day be depleted, but this is unlikelyto occur with topsoil because not all theworld's cropland is stibject, to excessiveerosion under normal agricultural use.Yet much of the world's topsoil will belost if steps are not taken to protect it.

A second contrast in the depletion of ,

these two basic resources is that theworld is far more aware of oil depletionand its consequences. Governmentseverywhere have responded to the grow-ing scarcity of oil but such is not the casefor soil. With only occasional excep-tions, agricultural and population poli-cies have not taken soil depletion intoaccount. In part, the contrasting aware-ness of oil and soil depletion is the un-derstandable product of differing levelsof information. The world oil crisis re-ceived a great deal of attention largelybecause oil is a widely traded commod-

Table 1-4. World Depletion of Oil and Topsoil, 1983

AnnualRate of Time

1983 Depletion To Deplete

s

Proven Reserves of OilUltimately Recoverable Reserves

of Oil

Reserves of Topsoil on Cropland

(billion barrels) (years)

670 18 372.100 18 114

. (billion tons)3.500 23 152

sonacts: Auicrtran Petroleum Institute. World Emig. Conference. Sunr al Ennio Rommes 1980(Loudon: 19801. topsoll recedes are Worldly:m.1; insittwe estimates Isce (lamer 4).

25

061 State of the 6World-198-1

ity. With ink's% c outlines being importers.With soil. however, the crisis is a quietone. Estimates are regularly made for oil

.........--" reserves. adjusting annually both for de-pletion through production and new dis-coveries. Such a procedure does notexist for world soil reserves. Indeed, notuntil topsoil has largely disappeared andfood shorragescr even famine have de-veloped does this loss become apparent.

The depletion. of oil reserves willmake the remaining soil even morevaluable.

The effect of price on the depletion ofthe two resources also varies. Higherprices for oil raise the amount that canbe ultimately recovered, but higherprices for food may simply lead to more-intensive lane use and faster topsoil loss.And the depletion of oil reserves willmake the substitution of energy for crop-land niorc difficult, rendering the re-maining soil even more valuable.

Beyond these key resources of oil andsoil, a daunting range of renewable sup-port systems are deteriorating undermounting pressures. As a result of over-cutting and clearing for farming andgrazing, the world's forests are shrinkingby nearly 1 percent per year. Each yearthe forested area of the tropics, wheremost deforestation occurs, is reduced by11.3 million hectares. and each year thedemand for forest products increases.19Distribution is a key factor. Althoughthere is an abundance of fuelwood in Si-beria. it might as %dell be on the moon asfar as Fthiopihn villagers are concernedbecause the oast of transporting fire-wood long distances is prohibitive.

A newly recognized threat to theworld's forests, particularly those in thenorthern tier of industrial countries, isacid rain. Poland, Czechoslovakia, East

AI.

and West Germany, and the UnitedStates are the countries most obviouslyaffected. One-third of West Germany'sforests show signs of damage, and some500 000 hectares of forests in Czecho-slovakia are dead or deteriorating. InNorth America there are also signs thattrees are dying and that forest productiv-ity is declining as a result of growing soilacidity. One of the disturbing character-istics of this forest dieback is that by thetime th'e problem becomes evident itmay he too late to save the trees.20 ,

In many areas grasslands are disap-pearing under the weight of excessivenumbers of cattle, sheep, and. goats- Inthe United States the Council on Envi-ronmental Quality reported that one-third of U.S. rangeland (excludingAlaska) was in fair condition and one-third in poor.2i Long evident in the Mid-dle East and North Africa, the excessivepressures are spreading to Africa southof the Sahara, to the Indian subconti-lient, and to China, Australia. and Mex-ico. Desertification. the word that de-scribes the conversion of productiveranchland into desert, has become_ partof the international lexicon.

Between 1950 and 1976 the world'sgrasslands sustained a doubling of beef

'ou :put, but since then there has been ruegrowth' at all. With overgrazing nowcommonplace, the world's herders,farmers, and ranchers are no longer ableto ekpand their herds apace with worldpopulation. The result has been 2 steadydecline in the world's per capita beefconsumption since 1976 and stagnationin this subsector of the world agricul-tural economy.22

Fisheries, too, are under excessivepressure. The world fish catch, whichhad tripled between 1950 and 1970, hasincreased little since then. Its annual rateof increase fell from nearly 6 percent in1950-70 to less than 1 percent. Thecatch from some of the leading fisheriesin the North Atlantic peaked in the late

26C

-s

Overview (ri)sixties and early seventies and is nowonly a fraction of what it was 15 yearsago. Ev'en recently exploited fisheries.such as those in the Gulf of Thailand.have reached their limits and begun todecline in the face of the growing worlddemand for protcin.23

In the eyes of some scientists, the lossof genetic diversity as plant and animalspecies disappear is the principal threatto a sustainable society. At the broadestlevel this consists of the loss of manyspecies of plants and animals as habitatsare destroyed. Clearing tropical forests.with their richness of flora and fauna,can eliminate countless uncataloguedspecies that have yet ;v be evaluated fortheir potential commercial value. Onceagain. mounting economic demands areleading directly to a resource deteriora-tion that adversely affects the economicprospect, in this case by reducing thepotential for new discoveries and forcommercial innovations based on thosediscoveries."

ENERGY-RELATED

STRUCTURAL ADJUSTMENTS

Aside from its adverse effect on eco-notnic growth, the severalfold increaselit the price of oil during the seventiescontributed to a massive redistributionof wealth from oil-importing countriesto those that export petroleum. A fewindustrial countries-the United King-dom, Norway, and the Soviet Union-have benefited from higher oil prices.But it has been the members of the Or-ganization of Petroleum ExportingCountries (OPEC) and Mexico. all ofwhich were preindustrial societies, thatgaMed most from the dramatic shift inthe terms of trade between oil and otherproducts.

The dimensions of this shift are per-haps best illustrated by the change M therelative prices of grain and oil, bothwidely traded commodities. Between1950 and -1973 a Valid of wheat couldbe traded for a barrel of oil. (See Table1-5.) Then.as the price of oil jumped, therelationship began to shift. By 1977, ittook 4.4 bushels of wheat to buy a barrelof oil; in 1982. it took nearly 8. For theUnited States, which paid much of itsmounting oil bill with farm products,this shift in the terms of trade stimulatedan enormous expansion of agriculturalexports.

Table 1-5. The International Terms ofTrade Between Wheat and Oil, 1950-83

Year

World PriceAmount ofWheat To

Buy a Barrelof Oil

Bushelof Wheat

Barrelof Oil

(dollars) (bushels)

1950 1.91 1.71 0.9

1955 1.77 1.93 1.1

1960 1.58 1.50 1.0

1965 1.62 1.33 0.8

1970 1.50 1.30 0.91971 1.68 1.65 1.01972 1.90 1.90 1.01973 3.81 2.70 0.71974 4.90 9.76 2.01975 4.06 10.72 2.61976 3.62 11.51 3.21977 2.81 12.40 4.41978 3.48 12.70 3.61979 4.36 IF 97 3.9

1980 4.70 28.67 6.1

1981 4.76 32.50 6.81982 4.36 33.47 7.71983 4.85 28.50 6.650VICCES: international Monetary Fund. Alonihly Ft.nannat Seaman 1980 Yearbook (Washington, D.C.:1980) and 1983 Yearbook (Washington. D.C.:1983).

27

Asoofe..

(121 State of the World-1984

lite same was title for olher countries-paying for oil with 'agricultural com-modities such as tea, coffee. or sugar.During the early seventies, when a barrelof oil was still priced at $2, it could bepurchased with 4 pounds of tea; in 1983,over 30 pounds were required. Forcoffee, 0 - terms of trade went from 4pounds in the early seventies to 22pounds in 1983. With sugar, the mostwidely exported farm commodity in theThird World, the "sugar price" of a bar-rel of oil went from just over 30 to nearly200 pounds during the same period.

In a sense, the terms-of-trade gain forthe oil- exporting countries is a desirableresult oldie rise in price associated withthe rapid depletion of an important non -renewahle resource. Unfortunately. theresulting- redistribution of wealth wasnot only from industrial to preindustrialsocieties but also funn preindustrial so-cieties that did not have oil to those thatdid. By any measurement, the handful ofcountries that had oil to sell greatly in-creased their slice of the global eco-nomic pie. It was their short-term re-ward for sharing a nonrenewable'resource with the rest of the world.

The OPEC increase in the price of oillaunched the transition to alternative en-ergy sources, a shift that is restructuringthe global economy. Some sectors areshrinking; others are expanding rapidly.just as the shift from coal to oil reshaped ,the economic system during the firstthree-quarters of this century, the shiftfrom oil to alternatives will bring pro-found changes in the decades ahead.

One of the industries most mmedi-ately affected by the oil downturn wasshipping, whose tanker fleets carry theoil to the consuming countries. The in-troduction of more-efficient supertank-ers that sparked a shipbuilding boom inthe late sixty , and seventies also led toenormous growth in tattier tonnage at atime when production of oil was on theprink of filming downward. Although

the fall in oil production was abrupt an 1swift, oil exports fell even faster. Witli;na few years after being lauached, some ofthe supertankers were u; '1 aiwaneseshipyards being cut up for scrap metal.Vast amounts of capital, steel, and en-ergy had been wasted buils:ing shippingcapacity that would never be usee."

Paralleling the decline in oil produc-tion was a fall in refining. Excess capacityresulted not only from the fall in outputbut also from the continued construc-tion of new refineries in oil-exportingcountries, which sought to maximizetheir income by selling less crude oil andmore refined products. In 1982 alone,67 refineries in the United States and 15in Europe were closed completely; manyothers operated at less than full capac-ity."

.As mentioned earlier, outside the oilindustry itself the greatest adjustmentsoccurred in the automobile industry.Nearly one-third of the 780,000 automo-bile workers in the United States wereunemployed by 1980. Both the numberof autos produced and their design werechanging. Even as production started tofall, the reins of industry leadership wereshifting from the 'Jnited States to Japan,where higher quality, more-fuel-efficientcars were rolling off the assembly lines.In 1980, for the first time since automo-bile production began, the United Stateslost its leadership position to Japan,which produced 7 million cars comparedwith 6.3 million in the United States."

As world automobile production fell,so did the number of automobile deal-ers. In the United States, still by far theworlds largest automobile market, some2,500 dealers closed their doors duringthe two years after the oil price hike of1979. And service stations also felt thecrunch. As gasoline consumption in theUnited States fell some 13 percent fromifs peak in the late seventies, the numberof service stations heeded to handle thisgasoline also declined."

28

(Mime (13)

The corollary 01 these sin inking sec-tors oldie economy has been thc expan-sion amber industries as the price of oilclimbed. Energy conservation has be-come a business in its own right: Theretrofitting of both residential and busi-ness stniciures in the northern industrialcountries has provided millions of jobs.The production and export of solarwater heaters has also become a majoractivity in several industrial countries. InCalifornia. the sale of solar equipmentreached $400 million in 1982. Tlwsearch for alternative sources of energyin Brazil has ledto a sugarcane-fed alco-hol fuel distillery sector. For the firsttime in the modern era bicycle sales ex-ceeded those of automobiles in key in-dustrial countries such as the UnitedStates. the United Kingdom, West Ger-many, and japan.29

As the advantages of recycling scrappaper, aluminum, and iron and sledhave become clear, a thriving interna-tional trade in scrap has developed.South Korea and Mexico. for example.get half their paper from recycling scrap.much of it imported. The highly compel-

.

hive electric arc sled mills now beingbuilt in some industrial countries andseveral developing ones rely almost en-tirely on scrap metal rather than virginore. Worldwide, a vigorous aluminumrecycling industry has begun to evolvesince the oil price increases of the seven-ties.30

Dramatic though the falls have been insome economic activities and impressivethough the gains have been in otherssince the mid -seventies, the adjustmentshave only just begun. In a great manyfields, such as renewable energy devel-opment, vast growth lies ahead. At thispoint the economic outlines of a sustain-able society are only barely visible.

The long-term shift from oil to r new-ables is leading to a geographic r tnic-turing of global economic act. .ty, . omeindustries are moving toward gent

It

mai fields in the Philippines and NewZealand and others are relocating nearheavily forested areas or those that arerich in sunlight. That this process is pro-ceeding most rapidly in the aluminumindustry is not surprising. given the en-ergy intensity or aluminum production.Conipanies are particularly attracted tocheap hydroelectricity in sparsely popu-lated regions that are accessible bywater. Promic.ent among the relocationsites are the Brazilian Amazon. Sumatra,and remote Canadian locations such asGoose Bay, Labrador. Within the SovietUnion aluminum production is shiftingto Siberia, where there is an abundanceof hydropower but few people.31

Perhaps the most extreme early exam-ple of the shift of production facilitiesacross national borders is the migrationof aluminum smelters from industrialcountries to the Brazilian Amazon. In-vestments in this industry to exploit theenormous hydroelectric potential of theAmazonian Basin have come from Bra-zilian firms as well as those based in Can-ada, Italy, Japan, the Netherlands, theUnited States, and West Germany. Incontrast to the situation in many indus-trial countries, where aluminum produc-tion is falling as plants are closed, Bra-zil's aluminum output is expanding andappears likely to continue to do so asinvestment plans materialize.62 Al-though the gradual relocation of the in-ternational aluminum industry to siteswhere cheaper renewable power sourcesare available will be costly, exploiting re-newable energy resources for such pur-poses may be essential to the evolutionof a sustainable economic system,

LIVING BEYOND OUR MEANS

As this overview of global ecologic andeconomic conditions indicates, we are

23

(Li) Ski le of the Worid-1984

living beyond our means, largely by bor-rowing against the future. In addition tothe widely recognized deficit financingpracticed by governments in an effort tomaintain short-term consumption levels,the world is engaging in wholesale 11;o.logical and agronomic def eit financing.

As the demand for p ducts of thebasic biological systemsgrasslands.forests, and fisherieshas exceededtheir sustainable yield, the productiveresource bases themselves are beingconsumed. In economic terms, the worldis beginning to consume its capital alongwith the interest. With biological sys-tems, as with income-earning endow-'news, this is possible only in the shortrun.

In addition to the decimation ofThirdWorld forests for firewood and for Um-be: exports described earlier, the de-struction of forests by acid rain and airpollution in the northern tier of indus-trial countries is another manifestationof living beyond our means. The failureto invest enough in emission controls forcoal-burning power plants in Poland.Czechoslovakia. West Germany, and theUnited States is helping keep electricitycosts down but is also destroying forests.In effect, society is getting cheaper elec-

. tricity in the short run by sacrificing for-ests over the long run.

With world fisheries there are innu-merable examples of biological deficitfinancing. One of the most dramatic wasthe Peruvian anchovy fishery. A studyundertaken by U.N. Food and Agricul-ture Organization marine biologists in1970 indicated that the highest yield thisfishery could sustain was 9.5 million tonsper year. The Peruvian Government,eager to maximize the immediate returnrather than the sustainable yield, permit-ted the catch to approach 13 million tonsper year in the early seventies. The pre-dictable result was the collapse of thefishery. The catch dropped to less than 3million tons per year where it remains

J

today. Although shifts in the HumboldtCurrent may also have affected the an-chovy fishery, there can be little questionthat overfishing contributed to its col-lapse. Tie derision to maximize theshort-term yield has cost Peru heavily inlong-term income, jobs, and foreign ex-change."

The world is engaging in wholesalebiological and agronomic deficitfinancing.

The adoption of agricultural practicesthat lead to excessive soil erosion is per-haps the most widespread example ofliving beyond our means. This mountingagronomic deficit is a result of efforts toextract more and more food from theland with increasingly intensive methodsof cultivation. In many countries the lossof productive topsoil has contributed togrowing food deficits.

Economists convert reported trendsin the value ofoutput into real output bydeflating the numbers to eliminate theeffects of inflation. A similar technique isnow needed in agriculture, where cur-rent production is inflated by the use ofpractices that cannot be sustained. In theUnited States, for example, soil scien-tists estimate that 17 million of theroughly 350 million acres in crops areeroding so rapidly that they should bewithdrawn from production immediatelyand planted to grass or trees to avoidlosing their productive capacity en-tirely." Other land that is now plantedcontinuously to row crops can be kept incultivation over the long term only if it isconverted to rotation cropping, alternat-ing corn or soybeans with, for example,grass or hay. If current U.S. agriculturaloutput were adjusted for these factors,then we would know better what our"real" or sustainable output is.

30

Overview

Similarly. where water used for irriga-tion leads to a declining water table orthe exhaustion of an undergroundaquifer, an alternative series of agricul-tural output data should be developedthat would indicate the sustainable out-put. In the U.S. southern plains, for ex-ample, much irrigation comes from theOgallala aquifer, an essentially nonce-chargeable water resource. The increasein output that was associated with theconversion from dryland to irrigatedfarming in this area is a boost that willlast for only a few decades. Indeed, thereconversion to dryland farming has al-ready begun in parts of Colorado, Kan-sas, and Texas.

In addition to these biological andagronomic deficits, the early eighties haswitnessed w enormous increase in debt,both public and private. Underlying theapparent vitality of U.S, agriculture, forexample, is a soaring debt,burden. Be-tween 1977 and 1983 U.S, farm debt in-creased from $100 billion to $215 bil-lion. This compares with annual netfarm income during the early eighties ofsome $22 billion per 'year." The in-crease in debt is largely the result offarmers borrowing against inflated landvalues. As land prices soared from theearly seventies through 1980, farmerstrapped by the cost price squeeze bor-rowed more and more money. But asland prices turned downward after 1980more farmers have been threatened withforeclosure than at any lime since theGreat Depression.

THE DEBT OVERHANG

Perhaps the principal economic manifes-tations of our inability to live within ourmeans are soaring national fiscal deficitsand foreign debts. In too many coun-tries, national political leaders have

(15)

failed to adjust population and eco-nomic policies to the changing resourcesituation and instead have engaged indeficit financing to maintain consump-tion levels. Nowhere is this more evidentthan in the United States, where the Rea-gan administration's budget deficits, actual and projected. for 1981 through1985 will increase the federal debt by anestimated $692 billion, raising it from$914 billion to $1,606 billion. The Rea-gan deficits will closely approach thoseof all previous administrations com-bined. (See Table 1.6.) Over this periodevery man, woman, and child in theUnited States will have incurred an aver-age of $2,800 in additional public debt$11,200 fcr a family of four." Not onlyhas the Unit..Y1 States mortgaged its fu-

Table 1.6. United Stater Gross FederalDebt, Total and Per Person, 1950414

Year

GrossFederal

DebtAnnual

Increment

DebtPer

Person

1950

1960

1970

(billion dollars)

257

291

383

(dollars)1,691

1,616

1,8751971 41(.1 27 1,9801972 437 27 2.0891973 468 31 2,2161974 486 18 2.279

1975 544 58 2.5251976 632 88 2.9041977 709 77 3.2261978 780 71 3,5141979 834 54 3,712

1980 914 80 4.0241981 1.004 90 4,3781982 i,147 143 4,9551983 1,384 237 5,9211984 1,606 222 6.827

soolices: Reonotole Report of the President and Stalutrcal ethuart of the ended States 1982-8.1 (Washing-ton. D.C.: U.S. Government Printing Office, 1983).

31

061 State of the World-1984

ture, but this huge national debt nowhangs like a dark cloud over the worldeconomy. sure to push interest rates upin world capital markets for years tocome.

Aggravated by the record real interestrates in the United States M-late 1982and 1983, external debt has continuedto expand throughout the Third World.Indeed. of all the economic problemsficing the world in the mid-eighties..none seeins quite so intractable as themanagement of huge external debts inthe Third World and Eastern Europe. Bythe end of 1983. developing countriesowed some $700 billion. The hard cur-rency debt of the East European coun-tries, excluding their ruble debt to theSoviet Union, was $53 billion. Together.these two groups owed three-quarters ofa trillion dollars."

Several converging forces contributedto the record debt levels. The 1973 oilprice adjustment led to a modest in-crease in borrowing by many oil-import-ing countries. For most oil-deficientcountries, however, it was not until 1979that the debt load began its steep climb.Close on the heels of this came high in-terest rates that sharply boosted the costof debt servicing. At the same time theprolonged global economic slowdown of1980-83 reduced the volume of ThirdWorld commodity exports and in mostcases their prices as well. a combinationthat sharply reduced export earnings.

The precise contribution of thisesources ofdebt growth varied by individ-ual countries. In some.tthe depletion ofkey resources reduced export earningsor raised import needs. For many ThirdWorld countries, the loss of topsoil con-tributed to the rising demand for foodimports, Exporters of tropical hard-wood, such as the Philippines. Thailand,and Nigeria. are lo3jng this valuablesource of foreign exchange as wood har-vesting exceeds the sustainable yield oftheir forests. Indeed. Nigeria has be-

come a net :mporter of forest products.importing some $221- million worth in1981." Livestock herds are dwindling insome African countries as grasslands de-teriorate, depriving them of a traditionalsource of export earnings. For thesecountries, and others such as Peru, withits heavy loss of fish meal exports, themismanagement of biological systemscontributed to a trade deficit. Resourcedepletionwhether boosting the priceof oil imports, increasing the need forfood imports. or depiiving borrowingcountries of raw material exportsfigures prominently in the worseningdebt situation.

Some oil-exporting countries alsofound themselves in a financially precari-ous position. Given the extremely lowreal interest rates during the high infla-tion years of 1979 and 1980, 'borrowingseented attractive to these apparentlycredit-worthy governments. What wasnot foreseen was the extent the demandfor petroleum would weaken as a resultof both conservation in importing coun-triec and the worldwide slowing of eco-nomic growth. The failure to anticipatethe drop in exports and oil prices led toserious miscalculations in oil-exportingcountries such as Mexico, Nigeria, andVenezuela.

The difficulty of managing thesemounting external debts can be seen inthe'relationship between the cost of debtservicing and exports. Half to two-thirdsof all export earnings are now requiredmerely to pay interest on foreign debt inArgentina, Brazil, Chile, Mexico, thePhilippines, and Turkey. For the ThirdWorld generally, one-fourth of exportearnings are claimed for this purpose. Inmany countries; debt servicing require-ments are so large that little foreign ex-change remains to import essential commodities such as oil. food, and industrialmachinery and parts. (See Table 1-7.)

Because the debt problem threatensthe viability of banks in the major Indus-

32

Overvsew (IVTable 1.7. interest Payments on External Debt in Relation to Export Earnings

of Major Debtor Countries, 1983

Country

TotalExternal

Debt

EstimatedExport

Earnings

Shareof Export

Earnings toPay Interest'

(billion dollars) (percent)

Brazil 93.5 17.5 64Mexico 86.6 22.2 47South Korea 40.3 19.4 25Argentina 38.5 9.2 50Venezuela 31.5 12.9 29Indonesia 28.8 16.8 21

Poland 27.0 10.2 31

Turkey 23.6 5.2 54

, 22.7 5.7 47Yugoslavia 20.0 10.3 23Chile 18.7 4.1 54Thailand 13.5 8.4 19Peru 12.5 3.7 41

Malaysia 12.4 11

Taiwan.11.3

8.5 27.5 4

Ecuador 7.1 2.1 38

'Assumes tmerest rite of 12 percent. tour debt service, including principal repayment. is of coursemuchlatger.soottem: Morgan Guaranty Trust Company and International Monetary Fund.

trial coUturies, it has grabbed the atten-tion of leaders in the industrial world asfew other Third World economic prob-lems ever have. For example, in manyinstances outstanding loans by majorU.S. banks to debt-burdened ThirdWorld countries exceed these banks'capital assets.99

If a wave of defaults were to engulf the'Third World and some of their loanswere to go bad, U.S. banks would facecollapse unless rescued by Washington.At a minimum, the inability of debtors torepay the principal will reduce capitalavailable from major banks for new loansin industrial countries.

In the preface to its MOM Deb Tables,published in 1983, the World Bank ob-serves that "the resolution of these diffi-culties lies in a restoration of economic

health to the global economy and a re-sumption of strong growth in interna-tional trade." Other analysts, includingthose at the International MonetaryFund and the Institute for International-Economics, make the same point, in-dicating that the debtor developingcountries and those in Eastern Europecan work their way out from under thedebt load with a return to a more tradi-tional rate of

worldin the world econ-

omy and in orld trade 40At issue is whether a rapid rate of

global economic growth can be sus-tained. Since 1979 the world economyhas expanded at an average of 1.7 per-cent per year, exactly the same as popu-lation growth. This means that on aver-age there has been no increase in worldoutput per person. Some countries, of

33

(18) State of the World-1984

course. have registered continuing gainsin per capita income, which means thatothers have experienced declines.

As discussed earlier, the deptetion ofnatnral capital, particularly oil, hasslowed world economic growth. (SeeTable -8.) When oil was priced at $2 abarrel, the world economy grew at anexceptional 5 percent per year, orroughly 3 percent faster than popula-tion, allowing for substantial gains in percapita income. From 1973 to 1979. whenthe price of oil averaged $12 a barrel, therate of economic growth dropped to 3.5percent, roughly double the rate of pop-ulation growth. But since' 1979, whenthe price of oil has averaged $31 per bar-rel and when other resource constraintson growth have intensified, the worldeconomy has barely kept pace with pop-ulation growth.

Given the likely continuation of highoil prices and the growing influence onlong-term growth of numerous other in-hibitors such as topsoil loss. freshwaterscarcity, grassland deterioration, defor-estation, and militarization of the worldeconomy. long-term world economicgrowth may not substantially exceed 2percent a year. This certainly'svould notbe enough to help Third World corm-tries work their way out of debt. And,given this growth prospect. the eco-nomic climate is unlikely to encourage

Billion1Dollars

2.000

1951 1969 1970 1480 1985

Figure 1-I. World Exports, 195145

commercial banks to continually add tothe current outstanding debt of theThird World and Eastern Europe.

Nor is future growth in internationaltrade likely to be rapid. According to theIntern rtional Monetary Fund, the valueof world exports peaked at $1,868 bil-lion in 1980 and fell to roughly $1,650billion in 1983, a decline of nearly 12percen' (See Figure 1-1.) The GeneralAgreement on Tariffs and Trade, mea-suring toe volume of trade, shows only anegligible decline in trade for this pe-riod. But measured by value or volume,there has been no growth in world ex-ports thus far during the eighties.41

Several factors are restricting world

Table 1.8. World Economic and Population Growth atThree Oil Price Levels, 1950-83

Annual Growth

PeriodOil PriccPer Barrel

(dollars)

GrossWorld Product

Gross WorldProdua

Population Per Person

(percent)1950-73 2 5.0 1.9 3.11973-79 12 3.5 1.8 1.71979-83 31 1.7 1.7 0.0

SOURCES Oil price data arc from International Monetary Fund: gross world product data are fromHerbert R. Block. As Pk:wary Product on 1980 (Washington. D.C.: U.S. Department of State. 1981)and Worldwatch Institute estimates. population data are from Umtcd Nations and Worldwatch Insti-tute estimates.

34

Overview

trade during the early eighties. such asthe economic slowdown and severe im-port restrictions in debtor countries thatare struggling to improve their trade bal-ance. In addition. the slower global eco-noinic growth has led many countries toattempt to protect domestic employ-ment and production by adopting pro-tectionist trade measures. But over thelong term it is the declining role of oil inthe world economy that will constraingrowth in trade. Oil, the engine ofgrowth in world trade for a, generation.is no longer spurring trade expansion asit once did. The 14 percent fall in worldoil consumption since 1979 was ex-ceeded by an even greater decline in oiltrade, since importing countries cut con-sumption more than oil-exporting coun-tries did.4? Although the declining de-pendence on oil lowers trade, levels, itstems from more-efficient use and theshift to sustainable energy sources, bothof which contribute to economic sustain-ability.

As the curtain slowly descends on theage of oil, investments in more energy-efficient technologies, in other fossilfuels. and in renewable energy resourcesare expanding. Of these. only the fossilfuels, coal and gas. are traded and theyare not as easily or widely transported asoil. As the world shifts to conservationand renewable resourceswhetherwood, hydropower, wind energy, geo-thermal energy. or any of the many oth-ersenergy production will becomemore localized. As energy production is

(19)

such a large sector, the localization ofenergy production will contribute to theoverall localization of economic activity.

In combination, these new influenceson world trade suggest it may be unreal-istic to expect it to resume the growththat prevailed prior to 1979. If this istrue, something more imaginative thanthe existing :'muddle through" ap-proach is needed if the world is to avoida decade of economic stagnation. Evenworse, a continuation of the "muddlethrough" approach could lead the worldinto an unmanageable economic crisis.To break out of this mold will requireleadershipleadership that will almostcertainly have to come from the UnitedStates and the International MonetaryFund. Unfortunately, the U.S. Govern-ment, with its vast budget deficits, is con-tributing to the crisis rather than ameli-orating it.

Better understanding of the origins ofthe current economic crisis is the key toformulating workable policies. Fortu-naiely there is a growing awareness thatconventional economic policies are nolonger working and that many or oureconomic difficulties are rooted in thedepletion of the resource base. Thisheightened awareness is necessary,though not sufficient, for the formula-tion of national population and eco-nomic policies that will put the world ona sustainable development path, onethat will restore a broad-based improve-ment in the human condition.

J

2

Stabilizing PopulationLester R. Brown

Progress at halting world populationgrowth has been extraordinarily unevenduring the last decade. Some countrieshave been highly successful, others com-plete failures. Some have reached zeropopulation growth without trying. Atone end of the spectrum are severalEuropean countries that have comp-leted the demographic transition andwhose population growth has ceased.At the other end are some 34 ThirdWorld countries whose populations areexpanding at 3 percent or more annu-ally.'

Assessing national population policiesis complicated by the changing criteriaof success. Until recently, progress wasdefined simply in terms of slowing popu-lation growth, so as to widen the marginof economic growth over that of popula-tion. During the seventies, however, theinadequacy of this goal became evident.Forests were shrinking. grasslandsdeteriorating, and soils eroding. Biolog-ical thresholds of sustainable yield werecrossed in scores of countries. When abiological system is being taxed, even amodest increase in human numbers canbe destructive. Failing to halt populationgrowth before such a critical threshold iscrossed leads to food shortages, fuel

scarcities, and a declining standard ofliving.

The relationship between populationand economic growth is also changing.When the world economy was expand-ing at 4 percent or more per year, theaverage rate of national economicgrowth was well above that of even themost rapidly expanding population. Butthe much slower economic growth of theeighties means national rates are begin-ning to fall below population growth inmany of the countries with high birthrates. The failure of these governmentsto introduce effective population poli-des is leading to a broad-based declinein living standards. In these circum-stances rapid population growth doesnot merely slow improvements in in-come, it precludes them.

POPULATION ARITHMETIC

Over the past decade many people con-cerned about rapid population growthhave cited with some relief the gradualdecline in the growth rate. Peaking atsomething like 1.9 percent around 1970,

36

Stabehznig Populaidon (21)si

annual growth in world population de-dined to 1.7 percent in 1983. Althoughthis is encouraging, the rate is not fallingfast enough to reduce the number ofpeople added each year. In 1970 worldpopulation increased by 70 million: in1983 the addition was 79 million' By thecriterion of sheer numbers, the world-wide effort to get the brakes on popula-tion growth is falling short.

There are few areas of public policy inwhich a lack of understanding of baskarithmetic has hindered effective policy-making as much as it has in population.Few national political leaders seem tounderstand what an annual populationgrowth of 3 percent. relatively innocu-ous in the near term. will lead to over acentury. Political leaders and economicplanners often think of a 3 percentgrowth rate as simply three times asmuch as a 1 percent rate. Although thisis true for one year, it is not true over thelonger term. as the rates compound. Apopulation growing 1 percent annuallywill not even triple in a century. but onegrowing 3 percent annually will increasenineteenfold. (See Table 2-1.)

Stopping word population growth re-quires bringing the number of births anddeaths roughly into balance. as they al-ready are in several countries. How farthe world has to go in this task can beseen in the data for 1983, when an es-timated 131 million births and 52 mil-lion deaths yielded the net increase ofsome 79 million. A clearer idea of the

Table 2-1., Relationship of PopulationGrowth Per Year and Per Century

Population PopulationGrowth Growth

Per Year Per Century

(percent)

23

(pen ern/270724

1.922

+(Pita Worldwatt h Insulin.:

dynamics of this growth can be gainedfrom analyzing the annual additions ofvarious countries. Leading the list isIndia. where there are now over 15 mil-lion more births than deaths each year.(See Table 2-2.) China, which reachedthe one,hillion mark in 1981, adds 13.3million) people annually. fewer thanIndia because of its much lower growthrate. Together. these two demographicgiants account for over one-third of theearth's new, inhabitants each year. Thefive leading national contributors toworld population growththese two,plus Brazil. Bangladesh. and Nigeriaconstitute nearly half the 79 million an-nual increment.

Many relatively small Third Worldcountries have an astounding number ofnew citizens to feed, clothe. and sheltereach wear because their growth rates areso high. Nigeria, for example, has 84million people, less than one-third asmany as the Soviet Union; yet each yearthere are 2.8 million more Nigerians,compated with 2.2 million more Soviets.In the Western Hemisphere, the U.S.population is four times that of Mexico'sbut the latter grows by nearly 2 millionpeople a year, whereas the V.S naturalincrease is 1.6 similar situa-tion exists in Asia: Burma, with only one-third the population ofjapan, adds morepeople each year.

COUNTRIES WITH ZEROPOPULATION GROWTH

The first country in the modern era tobring births and deaths into equilibriumwas East Germany, where populationgrowth came to a halt in 1969. It wasclosely followed by West Germany,whose population stopped growing in1972. During the decade since, several

37

(22) Stott of the World-I984

Table 2.2. Principal Sources of World Population Growth, by Country, 1983

Country PopulationAnnual

Growth RateAnnualIncrease

(million) (percent) (million)India 330.0 2.1 15.33China 1.023.3 1.3 13.30Brazil 131.3 2.3 3.02 ,Bangladesh 96.5 3.1 2.99Nigeria 84.2 3.3 2.78

Pakistan 95.7 2.8 2.68Indonesia 155.6 17 2.65Soviet Union 272.0 0.8 2.18Mexico 75.7 2.6 1.97United States 234.2 0.7 1.64

souoicr.. Population Reference Bureau, 1983 World Population Data Sheet (Washington, D.C.: 1983):.China's growth rate es author's estimate based on 1982 census by Chinese Government.

other countries-most recently Italy.Switzerland. and Norway-have joinedthe ranks of the demographic no-growthcountries.

By 1983, there were 12 countries,all in Europe, where births anddeaths were in equilibrium.

0.

By 1983 there were 12 copntries, all inEurope, where binhs and deaths were inequilibrium. (See Table 2-3.) For them,in contrast to the rest of the world, a yearof zero economic growth does not:auto-matically lead to a decline in living stan-dards. With the exception of East Ger-many and Hungary, all are in Wester iEurope. They range from tiny Luxem-bourg to three of the four largest coun-tries in Western Europe-Italy. theUnited Kingdom. and West Germany.With the recent addition of Switzerlandto the list. Europe's German-speakingpopulation has stabilized. Together.these &gen countries contain some 244million people. Although this representsonly 5.2 percent of the world total, it is

at least a beginning toward the eventualstabilization of world population, aprerequisite of a sustainable society.

Population stabilization was not an ex-plicit national goal in any of these 12countries. Declines in fertility flowedfrom economic gains and social im-provements. As incomes rose and as em-ployment opportunities for women ex-panded, couples chose to have fewerchildren. The improved availability offamily planning services and the liberali-zation of abortion laws gave couples themeans to achieve this. Population stabili-zation in these countries has been theresult, therefore, of individual prefer-ences, the product of converging eco-nomic, social, and demographic forces.

Several other European countriescould reestablish equilibrium 1ktweenbirths and deaths in a matter of years.Among these in Western Europe areFinland, France, Greece. the Nether-lands, Portugal, and Spain. In EasternEurope, Bulgaria and Czechoslovakiaare soon likely to follow East Germanyand Hungary along the path of popula-tion stabilization,

Encouraging though it will be whenthese countries reach population stabil-

38

,

,

Country

Stabilizing eMulation

Table 24. Countries With Zero Populition Growth, 1983*

AnnualRate of

Increase (+ )or Decrease ( )

CrudeBirthRate

CrudeDeathRate

(23)

Popu-lation

(per 1.000population)

(percent)

Austria 12 12 0.0 7.6Belgium 12 11 +0.2 9.9Denmark 10 11 0.1 5.1east Germany 14 14 0.0 16.9Hungary 13 14 0.1 10.7Italy 11 9 +0.2 56.6Luxembourg 12 +0.1 0.4Norway 12 10 +0.2 4.1Sweden 11 11 0.0 8.3Switterland I I 9 +0.2 6.5United Kingdom 13 12 +0.1 56.0West Germany 10 12 0.2 61.6

Total Population 243.5

1Zero population growth is here defined as within a range of plus or minus 0 2 percent change inpopulation sae per year.SOURCE: Worldwatchinstitute estimates, based on data in United Nations, Monthly Bulltim of Patton.New York. monthly.

ity, major gains in raising the share ofpeople in the world who live in a similarsituation awaits further fertility declinesin the three largest industrial countriesJapan. the Soviet Union, and theUnited Stateswhich now have annualpopulation growth rates of 0.7.0.8, and0.7 percent, respectively. The postwardecline in the Soviet crude birth rate lev-eled of in the early seventies, hoveringaround 18 since then. The U.S. birthrate, after, declining rather steadily from1957 until the late seventies. picked upslightly during the early eighties. Japan'sbirth rate, however, has been fallingsteadily for over a decade and, at 13. isnow the lowest of these three.'

With the number of young people en-tering their reproductive years now fall-ing steadily in both the United Statesand Japan, it is possible to envisage atime in the not-too-distant future when

births and deaths will come into balance.as they have in so much of Europe. Inboth countries this will be hastened bythe aging of the population and the con-sequent increase in death rates. The sit-uation is somewhat less clear for the So-viet Union, which has a highly fertile,rapidly, expanding Asian minority. Themoderate overall Soviet growth rate em-braces both European republics wherepopulation growth has ceased and Asianrepublics where it expands at typicalThird World rates. Indeed, some of theSoviet republics in Asia have higherbirth rates than ,some demographicallyprogressive states in India.* Overall,nevertheless, barring any unexpectedrises in fertility, it is only matter of timeuntil natural population growth comesto a halt in these three countries, sinceeach has a net reproductive rate wellbelow the replacement rate of 2.1-.

(24) Stale of the World-1984

RAPID NATIONAL FERTILITYDECLINES

The demographic transition. the shiftfrom high mortality and high fertility tolow rates of both, has historically been aslow process. In Western Europe deathrates and birth rates fell gradually over afew centuries. In countries now in theearly stages of modernization, the startof the transition has been much faster.The precipitous decline in mortality ofroughly a generation ago was often com:pressed into a decade or so and usuallyoccurred before the decline in fertilityhad begun. This produced record popu-lation increases against a backdrop ofin.sufficient, inequitably distributed re-sources, The result was historicallyunprecedented growth in human num-bers, commonly exceeding 3 percent peryear. These rates underline the urgencyof completing the last phase of thedemographic transitionthe decline infertilityas rapidly as possible. But re-ducing births is a much more complexundertaking than reducing deaths. Mor-tality rates can be brought down quicklythrough public health measures andchildhood vaccination programs, where-as the reduction in births requiresChanges in values that must then trans-late into changes in reproductive behav-ior.

As of the mid-eighties hope on thisfront springs not so much from thebroad global trends as from the sharpreduction in fertility in countries thatrepresent a wide cross section of cul-tures, religions, and political systems.This diversity is evident in the four coun-tries in the Western Hemisphere thathave the lowest crude birth ratesCuba(14), Canada (15), the United States(16), and Barbados (17).5 It would behard to find two national cultures moresimilar than the United States and Can-ada, so their similar fertility levels are

not surprising, but the contrasts be-tween them and the two Caribbean is.land cultures are striking.

The four developing countries in Asia,on the other hand, that were among thefirst to lower their birth ratesHongKong (17), Singapore (It), Taiwan (23).and South Korea (25)are rather ho-mogenous in that all are predominantlySinitic (Chinese-based oj -related) cul-tures.6 In addition to their common or.similar ethnic backgrounds, all four areeconomically vigorous societies movingrapidly along the path to modernization.And they all have had well-designedfamily planning programs, with contra-,ceptive services widely available, for atleast a decade and a half.

In 1979 China became the firstcountry to launch a one-child fam-ily program.

Perhaps the most impressive familyplanning achievement in the developingworld has occurred in China. Familyplanning was periodically caught up inthe ideological crosscurrents of the Chi-nese communist party from 1949 untilthe early seventies, but since that time asustained national effort has been underway to reduce births. By the mid-seven.ties the Chinese leadership was urgingall couples to stop at two children, and in1979 China became the first country tolaunch a one-child family program.

By 1980 China had lowered its crudebirth rate to 20, an achievement manythought impossible in such a large court-try still at an early stage of economic de-velopment. Although the 1982 censusshowed a slightly higher birth rate of 21,this does not diminish the success em-bodied in China's remarkable reductionin fertility from 34 to 20 in only a decade.This precipitous decline closely parallels

40

Stabilizing Population (25)

that in Japan froni 1948 to 1958. whenthe birth rate fell 47 percent. from 34 to18'

China's family planning program isdistinctive in several ways. To beginwith, the national leadershy has beendeeply involved in designing and sup-porting the program. More than mostcountries, China has fostered public dis-cussion of the population problem andparticularly the effect that continuinggrowth has on future living standar/is.As population policy was integrated intooverall economic planning, it led in thelate seventies to the estaGli3hment ofbirth quotas. The oyerall plan aimed toensure that targets for raising livingstandards were met; couples who had nochildren were given priority in the quotaallocation. Once births were allocated topeople at the productiNmeam level,peer pressure played a .mportant rolein assuring compliance. To even con-sider such an ambitious birth controlprogrhm requires, of course, the readyavailability of family planning services.including abortion.

From birth planning it was a relativelysmall step to the provision of economicincentives to couples who would agreeto have only one child. The one-childfamily campaign was not introduced be-cause China's leaders were enamoredwith the concept per se, but because thebuildup in population pressure lift fewalternatives. Gaining social, acceptanceof this concept is not easy in a society*'where large families are traditional andwhere, there is still a strong preferencefor sons, particularly in the countryside.This unprecedented policy initiativeputs China one step ahead of other

.Third World countries in trying to haltpopulation growth.

On a smaller scale. neighboring Thai-land's reduction of fertility has also beenimpressive. Its 'estimated crude birthrate of 26 is not yet as low as China's butit apparently started from a higher level

Table 2-4. Thailand: Share of MarriedWomen Practicing Contracer

197041

Year Percent

-1970 14

1975 371979 501981 58

SOURCE: International Family Planning Perspectives.September 1980 and June 19844.

in 1970. Data on annual birth rates arenot available in Thailand. but variousfertility surveys taken from 1970pnwardhave measured contraceptive usage. Theproportion of married Thai'-women ofreproductive age who were using con-traceptives -went from 14 percent in1970 to nearly 60 percent in 1981, alevel approaching that in industrial soci-eties.. (See Table 2-4.)

In 1983, Thailand's birth rate was 26only one point higher than that ofSouth Korea, which launched its familyplanning program many year's earlier.Indeed, it was roughly the same as theU.S. rate immediately after World WarII. Thailand's achievement is all themore laudable because its reproductiverevolution has preceded widespreadeconomic $levelopment. Central to itssuccess is a public education- programthat emphasizes both the economic andsocial advantages of small families andthe ready availability of contraceptiveservices. Its yip:row family planningprogram is credited with perhaps 80 per-cent of the national fertility decline since1970. Behind this imaginative programis Mechai Viravaidya, the innovative andcharismatic head of the family planninggroup..

Analysts of the That fertility declineassociate the rapid change in reproduc.tive attitudes and behavior with the highdegree of social and economic Iride pen-dence of women. The influence of Bud-dhism, which does not restrict con-

4

(26) State of the World-1984

traception and is not particularly prona-talist, may also contribute to the readyacceptance of family planning. And Bud-dhism emphasizes individual responsi-bility, which may have created a socialenvironment particularly receptive to aprogressive family planning program.

. One of the most rapid fertility declineson record has occurredin Cuba since themid-sixties. The country's 1983 crudebirth rate of 14 per 1,000, lower thanthat of the United States, is all the moreremarkable because it was not the resultof a concerted national program tolower fertility and curb populationgrowth. This recent birth rate declineshould be seen, however, in historicalperspective, since Cuba, along with Uru-guay and Argentina, experienced a grad-ual decline m birth rates in the earlydecades of the twentieth century. At thetime of the Castro takeover M 1959 thebirth rate was 28, already well belowthose of most of Lain America.

One of the early actions of the newgovernment was to begin enforcing therather restrictive abot don law that wasalready on the books. This pushed birthrates up sharply. to over 35 in 1963. (SeeFigure 2-0 In 1964, the interpretation

BirthRate

40

30-.

20-

10-

t i1950 1960 1970 1980 1985

Figure 2-1. Cube's Crude Birth Bete, 195042

(Interpretation"of law relaxed)

(restrictiveabortion law

enforced)

Sources: Pop. Ref. Bureau;Cuban Ministry of Public Health

of the restrictive abortion law wasrelaxed and, abetted by widespread so-cial gains for women and broad-basedimprovements in health care services,the birth rate began a precipitous de-cline that continued for the next 16years. By 1980 it had fallen to 14. Al-though the birth rate had been morethan halved, the population growth ratehad seen cut by some two-thirds, to lessthan 1 percent per year.10

After China, the most populous ThirdWorld country to reduce its fertilitysharply is Indonesia, Until the late sixtiesIndonesia was a pronatalist country. Itsonly population program was one oftransmigration from densely populated.Java to the sparsely populated outer is-lands. After years of struggling at greatcost to move Javanese to these territo-ries, and discovering that the resettle-ment flow was a mere trickle comparedwith the torrent of births, the IndonesianGovernment shifted its attention to fam-ily planning.

Indonesia's national family planningprogram was launched in 1969. By 1976,when the World Fertility Survey con-ducted a study there, fertility had fallensubstantially in some regionsas muchay. 12 pe:ri-Prtt in West Java to 34 percentin Bali. Indonesia's family planning pro-g; am has been distinguished by stronggovernment support and a highly ac-claimed local approach that goes far be-yond the more traditional clinic system.The direct involvement of the local vil-lage leaders as motivators, field workers,and even contraceptive distributors hasbeen central to the program's success,'By 1983 Indonesia's birth rate had fallento 32 and its population growth rate wasreportedly 1.7 percent per year, wellbelow the nearly 3 percent that existedbefore the program began. 11

Another Latin American countryMexicois the site of one of the mostrecent fertility reductions in a majorThird World country. Prior to 1972 the

42

Stabilizing Population (27):

will be noted in Chapter 3, this growthwas closely tied to an ahundance ofcheap oil. With the 1973 oil price hike,economic growth began to slow. Withthe 1979 increase it slowed further. Thefollowing four years the world economyexpanded less than 2 percent per year.Although these four years are not inthemselves enough to constitute a trend,the less favorable resource conditionsthat contributed to the slower growthduring this time may also lead to slowgrowth over the long term.

The Wall .Street Journal, in a survey ofEuropean economic analysts at the endof 1982. reported that many expect theprolonged recession of the early eightiesto become permanent. In contrast toearlier recessions, when recovery trans-lated into a 4-6 percent growth rate, theJournal noted that these analysts sawEuropean recovery from the current re-cession in terms of a 1-2 percent rate,"

For parts of the Third World, pros-pects are even grimmer. A 1983 assess-ment of Africa's future by the EconomicCommission for Africa reported that"the historical trend scenario is almost anightmare." It continued: The poten-tial, population explosion would havetremendous repercussions on the re-gion's physical resources such as land.. . . At the national level, the socio-eco-nomic conditions would be character-ized by a degradation of the very essenceof human dignity. The rural population. . . will face an almost disastrous situa-tion of land scarcity whereby whole fami-lies would have to subsist on a mere hec-tare of land." A World Bank analysis.ofAfrica's economic outlook described theCommission's assessment as "graphicbut realistic."' 4

Given the emerging constraints ongrowth, particularly in basic sectors suchas food and energy. the world is going tohave great difficulty resuming the rapideconomic growth of the 1950-73 period.Expanding global economic output even

official Mexican policy was like In-donesia'sthe more people the better.President Echeverria's announcement in1972 that Mexico would launch a familyplanning program came as a surprise. Atthat time Mexico's crude birat rate was44 and its overall population growth ratewas 3.5 percent annuallyone of thehighest in the world. Within a decade thebirth rate dropped to 32. Combined witha death rate of 7, this still resulted in apopulation growth rate of 2.5 percent,v7hich was far too rapid. And there areremote rural areas where family plan-ning services are not yet available.Nonetheless the progress of a decade in-dicates that Mexico has at least set thestage for a continuing decline in fertility.The challenge now will be limiting birthsiiover the rest of this Century among theenormous number of young people en-tering their reproductive years as a re-sult of the extraoidinarily high birth latebefore the mid-seventies."

The countries that have achievedrapid national fertility declines repre-sent a wide variety of cultures. The com-mon denominators are a committedleadership and locally designed pro-grams. Experience to date shows a broadpopular interest in planning families anda willingness, in some cases an eager-ness, to take advantage of services whenthey become available. Each countrydesiring to reduce fertility must ofcourse design its own program, one thatis responsive to its values, traditions, andneeds.

POPULATION VERSUS

ECONOMIC GROWTH

Overall, global economic growth duringthe third quaner of this century wasmore than double that or population. As

43

I

(28) Stair of the World- -1984

by an average of 2 percent per year maytax the skills of economic policymakers.Countries with rapid population growthmay thus face declines in living stan-dards-unless they quickly reduce theirbirth rates.

Slower economic growth will have animpact everywhere, but the effect willvary widely according to national popu-lation growth rates. For West Germanyor Belgium, which have attained zeropopulation growth, a 2 percent rate ofannual economic growth will still raiseincomes 2 percent each year. For coun-tries such as Kenya and Ecuador, whosenumhers expand at more than 3 percentper year, a 2 percent economic growthrate will produce steady declines in in-comes and living standards.

If an economic growth rate of 2 per-cent per year becomes the new norm,then nearly haif the world's people-those living in countries with annualpopulation growth rates of 2 percent ormore-face possible income qtagaationor decline. Countries where the threat offalling income is greatest are thosewhose numbers grow at 3 percent ormore per year. These 34 countries, al-most all in Africa, the Middle East, andCentral America, have a combined pop-ulation of 394 million.*

Within this group, countries with ex-portable surpluses ofoil may be temptedto neglect population policy, with the re-sult that their populations will continueto multiply rapidly. sustained by the im-ported resources that petroleum buys.Over the long term, however, as oil re-serves dwindle and the exportable sur-plus disappears, they may find them-selves with populations that far exceedthe carrying capacity of local resources.Countries such as Iran awl Nigeria,where oil production and exports havealready peaked, illustrate well the risksthat oil-producing countries with rapidlyexpanding populations face over thelong term. Situations like these have the

greatest long-term potential for massivehuman suffering.

Unfortunately, economic growth hasalready fallen behind population growthin many countries. The World Bank re-ports that per capita GNP declined in 18countries from 1970 to 1979. (See Table2-5.) In a few cases this was caused bydisruption of economic activity as-sociated with political conflicts and in-stability, but in the great majority popu-lation growth simply outstripped that ofeconomic out put.

Central to the decline in per capita in-come during the seventies in many of thecountries in Africa, a largely rural conti-nent, was the decade-long decline in percapita food production. The growth in

Table 2-5. Countries Experiencing aDecline in Per Capita Income, 1970 -79

Country

AngolaBhutanChadCongoGhanaJamaica

1.ibya

MadagascarMauritaniaMozambique\ icaraguaNiger,

Sierra 1.eoneUgandaUpper VoltaZaireZambiaZimbabwe

Total

Population

AnnualRate ofDecline

(million) (percent)

6.9 -9.61.3 -0.14.4 - 2.41.5 -0.2

11.3 -3.02.2 -3.7

2.9 - 1.68.5 - 2.51.6 -0.7

10.2 -5.32.6 - 1.65.2 -1.2

3.4 -1.212.8 -3.55.6 -1.2

27.5 - 2.65.6 --1.97.1 -1.7

120.6

coURcE: World Rank. 1981 World Barth Alias(Washington. DZ.: 1982).

44

Ma:nil:mg Population (29)

Africa's food supply. ((impale% favorablywith that for the world as a whole, but itsincrease in human numbers is far morerapid. Plagued by the fastest populationgrowth of any cominent in histot*, aswell as by widespread soil erosion anddesertification, Africa's food productionper person has fallen I I percent since1970.16

Given the prevailing, economic condi-tions of the early eighties. the ranks ofthe 18 countries with declining percapita GNP are likely to swell dramati-cally. In a report published in late 1981the World Bank projected a decline inthe average income of 187 million peo-ple in 24 low-income countries in sub-Saharan Africa. This is the first time theWorld Bank has projected a decline inliving standards for a major region of theworld) 7

As the growth in the production ofmaterial goods and services slows, thedistribution issue must be viewedagainst a new backdrop, one unfamiliarto this generation. With the changinggrowth prospect. pressure to reformu-late economic and social policies withbask human needs in mind will no doubtincrease. This task will be far more diffi-cult than it was in the era of rapid eco-nomic growth. with its underlying beliefthat a rising tide raises all ships. As econ-omist Herman Daly has perceptively ob-served, turning our focus to meetingbask human needs will "make fewer de-mands on our environmental resources.but much greater demands on our inoralresources."18

POPULATION /RESOURCEPROJECTIONS

Existing projections of population andresources do not provide a solid fimnda-

lion for formulating intelligent popula-tion policies. U.N. projections showworld populanon continuing to growuntil it reaches I I billion before levelingoff a century or so hence,16 These popu-lation figures are the product of two setsof assumptionsone explicit and oneimplicit. The explicit assumptions aredemographic. They include country-by-country assumptions about future fertil-ity levels. sex ratios, life expectancies,and numerous other demographic varia-bles, If these explicit assumptions hold,the projected increases in world popula-tion will materialize.

Africa's food production per per-son has fallen 11 percent since1970.

But population growth does not occurin a vacuum. Current projections ofworld population are based on the im-plicit assumption that the energy, food.and other natural resources required tosupport human life are going to be asreadily available M the future as they

.have been in the past. They assume thatthe production of the major biologicalsupport systemsfisheries, forests.grasslands, and croplandsthat satisfybasic human needs for food, shelter, andclothing will continue to expand alongwith population. It is perhaps unfortu-nate that population projections aredone by demographers on their own.Projections by an interdisciplinary teamof analysts including, for example,agronomists, economists, and ecolo-gists would be more realistic since pop-ulation growth cannot be divorced fromthe carrying capacity of local biologicalsystems. Continuing increases inhuman population on the one hand andthe progressive deterioration of life-support systerni,on the other are not

45

A

(I0) State of Me World-1984

compatible over the long term.The unreality of current population

projections can be seen in the numbersput fonit for individual countries. Ac-cording to the World Bank, which usesslightly lower projections than the U.N.medium-level ones. the growth aheadfor some countries can only be describedas phenomenal. India is projected to addmore than another billion people to its1983 population of 730 million beforestabilizing at 1.84 billion, while neigh-boring Bangladesh and Pakistan couldincrease from 96 million each at presentto 430 million and 411 million respec-tively. If these three countries growas projected. the Indian subcontinentwould be lime to 2.7 billion people.more than the entire world population in1959. The 84 million Nigerians of todayare projected to increase to 623 million,more people than now live in all ofAfrica. Mexico would grow from 76 inil-lion to 215 million people. roughly thesize of the current U.S. population. Andthe populations of several CentralAmerican countriesEl Salvador. Gua-temala, and Nicaraguawould triple be-fore stabilizing.te Clearly, national andglobal resources would be stretched tothe breaking point well before increasesof this size materialize.

Many of the economic stresses afflict-ing the world economy during the mid-eighties have their origins in chang-ing population/resource trends. Whenworld population reached the three bil-lion mark in 1960, the per capita produc-tion of almost every major commoditywas still increasing. But when world pop-ulation moved., toward four billion, de-mands began to approach the sustain-able yield of many biological supportsystems: The world harvest of forestproducts began to fall behind popula-tion growth; 20 years of rapid growth Mthe world fish catch came to an end; andper capita growth in world beef output

46

halted in 1976. World production of oil,the leading energy resource, peaked in1979. The growth in world grain pto-duction, which had been steadily outdis-tancing population since mid - century,has barely kept pace with population'growth since 1973. In North Americafood production has continued to out-strip population growth. But in Africa. asmentioned earlier. the reverse is true.Since 1970 per capita food productionthere has been falling by some 1 percentper year.2'

Faced with this emerging picture of anew population/resource balance, Presi-dent Carter was frustrated by the inabil-ity of U.S. Government agencies to pro-vide coherent sets of projections inimportant areas such as energy, water,and food. This lack of global foresightcapability led him to launch the Global2000 study in 1977. Undertaken by theU.S., Council on Environmental Qualityand the Department of State in cooper-ation with 17 specialized governmentdepartments and agencies, the studyexamined, among other things, theconsequences of the projected increasesin world population.

The Global 2000 study team disccv-ered numerous inconsistencies amonggovernment projections and policies. Inassembling sector forecasts from thevarious agencies, overlapping resourceclaims came to light. The Department ofAgriculture, for example, was incor-porating in its projections water thatthe Department of Energy was expectingto use to launch synfuels projects. Therisk of such a lack of coherency in plan-ning is that it can lead to resource scar-cities, as in the case of water, or to excesscapacity, as in the case of electrical gen-eration. In either , case resources arewasted.

The Global 2000 Report, the end prod-uct of this Erg effort to project globaleconomic, environment, and resource

Stabele:Ang Populatton 011

trends. observed in an oh-quoted con-clusion that "barring revolutionary ad-vances in technology. life for most peo-ple on earth will be more precarious in2000 than it is nowunless the nationsof the world act decisis eh, to alter cur-rent trends." Five years have passedtote the study went in press. Unfbrtu-nately, life is more difficult now for manyof the world's people than it was then."

The only other comprehensive at-tempt to project world trends to the endof the century was undertaken in themid-seventies by the United Nations. Di-rected by economist Wassily Leontief. itforesaw a rosy economic future for theworld. The weakness of this undertakingwas that it was done almost entirely byeconomists and lacked a solid interdisci-plinary foundation. The result was pie-in-the-sky projections and misleadingconclusions about where the world washeaded. For example. the U.N. studypostulated for the remainder of this cen-tury an average agricultural growth ratein the developing world of 5.3 percent,a rate with little foundation in either thehistorical experience ofdeveloped coun-tries or in current Third World realities.The authors noted that soil erosionwould affect future food production, butbecause data was sketchy they chose sim-ply to ignore it. If agronomists had beeninvolved in the project they could at leasthave estimated erosion's impart on fu-ture productivity, thus making the pro-jections more realistic apd useful."

Concerned with the declines in percapita production of the basic resourcesthat underpin the global economy, sev-eral individual countries decided to ex-amine the implications of the Global2000 study for their own national poll-des. Countries as varied as Japan. Mex-ico. and West Germany have expressedinterest in the "Global 2000" approach.China, well aware of indigenous re-source constraints, is undertaking an

ambitious China 2000 study. Japan hasorganized a Year 2000 Committee tofocus on the implications he changing global resource outl for the Japa-nese economy." ,nited States, un-fortunately. has Nile to follow throughon Global 2000. The result has been aninternational vacuum as the dominantworld economy and traditional worldleader on such matters sit on the side-lines. failing to provide leadership onthis critical complex of issues.

One of the first countries to examinesystematically the long-term popula-tion/resource balance was China. Aspart of the post-Mao reassessment, Chi-nese leaders projected future populationsize based on the assumption that cou-ples would'have only two children. Evenunder this scenario, given the country'syouthful age structure China would addanother 300 or 400 million people be-fore population growth ceased. Afterrelating these projections to the availa-bility of land, water, energy, and otherbasic resources and to the capacity of theeconomy to provide jobs, the leadershipconcluded that they had no choice but topress for a one-child family lest theyjeopardize their hard-earned gains in liv.ing standards."

Elizabeth Croll, China scholar at Ox-ford University, observes that Beijinghad concluded that "unless the popula-tion to be fed, housed and clothed is re-duced. the goals of any developmentstrategy in China are bound to fail. "2'The principal difference between Chinaand other densely populated developingcountries such as Bangladesh, India,Egypt, Nigeria. and Mexico may be thatthe Chinese have had the courage andthe foresight to make these projections s

and to translate their findings into publicpolicy. If others took a serious look atfuture population/resource balances,they too might well decide that theyshould press for a one-child family.

47

(32) State of the World-1984

NEW POPULATIONINITIATIVES

As world population moves toward fivebillion, the per capita production ofmany basic commodities is falling. Theeffort to raise incomes and living man-ciards is faltering in many countries, par-ticularly where population is growingmost 'rapidly. The fall in global eco-nomic growth from over 4 petcent annu-ally to 2 percent is dividing the worldinto two groups: those where economicgrowth exceeds population growth, andthose where it does not. For one group,living staadards are rising. For the otherthey are falling. One group can hopethat the future will be better than thepresent. In the other. hope is turning todespair.

The fall in per capita incomes is occur-ring, almost without exception. in coun-tries that have given little attention tothe human side of the populatibn/resources equation. The attention of po-litical leaders and the allocation of,budgetary resources have both focusedalmost entirely on the supply side, onexpanding output. One consequence ofthis imbalance is that more and more ofthe growth in output is required to sat-isfy the increase in population, with littleremaining for improvements in percapita consumption.

Where population growth is rapid,changing economic circumstances callfor new population policies. Many devel-oping Countries are stalled in the middleof the demographic transition discussedearlier. If economic growth remainsslow, barely keeping pace with popula-tion growth or even (kiting behind it,then high-fertility developing countriescannot count on economic improve-ments to reduce births as they did in theindustrial countries. Fortunately, recentexperience has shown that countrieswith bread-based but inexpensive health

care systems and well-designed familyplanning programs that encourage smallfamilies can bring fertility down evenwithout the widespread economic gainsthat 'characterized the demographictransition in the industrial societies."

Making family planning services uni-versally available is the very first stepthat all countries should take. Beyondhelping to curb population by prevent-ing unwanted births, it makes peopleaware that they can control their fertility,in effect creating its own demand. Andbecause family planning leads to betterspacing of births, it lowers infant mortal-ity, which in turn fosters lower fertility,Although each country represented atthe U.N. Conference on World Popula-tion in Bucharest in 1974 agreed thataccess to family planning services was abasic human right, not all governmentshave followed through. As a result, anestimated one-third of all couples still goto bed unprotected from unplannedpregnancy.ts

Essential though family planning ser-vices are, they are not in themselvessufficient. Data from the World FertilitySurvey show the desired family size inmany countries is still four or five chil-dren. Although this is lower than it wasjust a few years ago, in some countrieshaving this many children would lead tovast populatiortgains that would steadilyreduce livin standards '9 Reducing fer-tility to the 1 el circumstances call forrequires public e cation programs thatinform people about the future relation-ship between population and resourcesand about the economic consequencesof continuing on the current demo-graphic path. More projections likethose done in Beijing are needed. In tra-ditional countries such as China,' child-bearing decisions are still influenced bya parental desire to be looked after in oldage. By emphasizing future population/resource relationships, .vernment offi-cials can shift parents' considerations of

48

Stabilizing Population ( 33 )

childbearing decisims from their ownwell-being to that of their children.

For most Third World coumries, how-ever, the provision of family planningservices and public education programsbased on projections will not slow popu-lation growth quickly enough to avoid adecline M living standards. Govern-ments in these countries will need toreorient economic and social policies tolower fertility further. Traditionally.government policies that affected popu-lation growth encouraged large families.In most countries, for example, incometax deductions and -naternity leaves areavaibble without restriction. Now someconmries are beginn,ng to alter theselong-standing policies. For example.South Korea and Pakistan limit incometax deductions to two children. Tan -iania, Sri Lanka. and Nepal have goneeven further and entirely eliminated taxdeductions for dependent children.'"

Several governments restrict mater-nity benefits. In the Philippines, they arelimited to the first four births; in Ghana,Hong Kong, and Malaysia. to three; andin South Korea. even more stringent. toonly two. Tanzania, adapting this gen-eral approach to African family planningprograms' emphasis on child spacing,provides paid maternity leave to em-ployed women only once every threeyears.'1

Sonic governments use access toeducation and to public housing orto low - interest loans for the purchaseof housing as a carrot to encouragesmall families. In China. the certificateawarded to couples who pledge to haveonly one child entitles them to preferredaccess to schooling for that child. SouthKorean government employees whostop at two can deduct their educationalexpenditures from income tax. In Sin-gapore, having no more than two chil-dren gives couples preferred access tohousing. much of which is governmem-constructed.ss

Other countries have designed rewardsystems to encourage sterilization or theuse of contraceptives. India. for exam-ple, was the first government to providesmall, one-time payments to men andwomen who were sterilized. In somecountries such payments are regardedmore as compensation for lost wages andtravel costs than as incentives per se. TheIndian payments in 1983 ranged from311-13, for example, roughly two weeks'wages for rural laborers. In Bangladesh,those sterilized receive new clothing --asari for women and a fungi for menplus travel-cost reimbursements

Experience shows that such paymentsdo make sterilization more popular. In a1983 Worldwatch Paper. Judith Jacob-sen noted that in Sri Lanka, the numberof sterilization performed in govern-ment family planning programs in-creased when payments were first intro-duced in January 1980. Nine monthslater. when payments were increasedfivefold to match those offered on pri-vate estates, sterilization clinics wereswamped. The number of sterilizationperformed at one clinic increased from 6to 35 a day after the introduction of thepayment and rose to 150 a day after theincrease.""

Some countries have begun to experi-ment with community incentives. A com-munity that achieves certain family plan-ning goals. either measured in terms ofcontraceptive usage or in reduction inbirths, becomes eligible for a newschool. a village well, a community irri-gation pump, or even a television set.This approach. being tried in Thailandand Indonesia. has the advantage ofmobilizing peer pressure to limit familysize."

There is an urgent need for data to begathered regularly in this vital arca, topermit continuing evaluations of prog-ress and reports to the public. The col-lection and monthly publication of birthrates would help measure progress on

ea

(3;) State of the

this critical front, much as is now thecase with employment, inflation, or thebalance of payments. It would also con-tribute to public awareness of the needto reduce family size and halt populationgrowth.

In many countries, reducing the birthrate rapidly enough to avoid a decline inliving standards will require a Herculeaneffort and the constant attention of na-tional political leaders. Administratively,successful implementation of populationprogrants may require that responsibil-ity for them be escalated from a divisionin the health ministry, where it com-monly resides. to a cahinet-level com-mittee that regularly reviews the situa-tion. Unorthodox though this may be. itis the level of attention befitting thegravity of the issue.

Among the Third World countriesthat hale sticressfulls reduced fertility.no two approaches are identical. But allhave invoked national-leaders' commit-ment to reduce fertility. the widespreadavailability of family planning services,and a public education program thatlitiks population growth to the long-termsocial interest as well as to benefits forindividual families. Several of the moresuccessful countries have often usedsome combination of economic incen-tives or disincentives to encourage smallfamilies.

World-1984

Governments will be forced to settledifferentet, between private interests,sometimes better served by larger fami-lies, and the public or social interest,which is invariably better served bysmaller families. Reconciling these dif-ferences can be extraordinarily complexand politically costly. Failure, however,could be catastrophic. The issue is hoiynot whetherpopulation growth willeventually be slowed. Will it be hu-manely, through foresight and leader-ship. or will living standards deteriorateuntil death rates begin to rise? The latterwould certainly reestablish a populationequilibrium of sorts, but it would bethrough, high birth and deativ'rates,rather than the low birth and death ratescharacteristic' of countries that havecompleted The demographic transition.

In an age of slower economic growth,impromnents in living standards maydepend more on the skills of familyplanners than on those of economicplanners. As the outlines of the new eco-nomic era become more visible, popula-tion policy seems assured a high placeon natic 1al political agendas. Too manygovernments have delayed facing theissue for too long. When they belatedlydo so, they may discover, as China has,that circumstances force them to pressfor a one-child family.

... 3

ReducingDependence on Oil

Lester R. Brown

If the 7 percent annual growth in globaloil consumption that prevailed from1950 to 1973 had continued, the worldwould have increased oil use from 20.4billion barrels in 1973 to just over 40billion barrels in 1983. At such a con-sumption level unprecedented adjust-ments would be required, adjustmentsthat would place great pressure on theinternational economic' system. But thisdid not happen, because a group ofpreindustrial, oil-exporting countriesthat controlled the lion's share of worldoil .exports decided in late 1973 that, oilwas vastly underpriced. To remedy this,they quadrupled its price, sending eco-nomic' shocic waves through the worldeconomy and making OPEC a house-hold word.

The 1973 oil price adjustmentchecked the runaway consumptiontrend, but it was the 1979 increase thatreversed it. As a result of the two pricejolts, world oil consumption in 1983 to-taled only 20 billion barrels, not the 40billion barrels it might have been.*

Despite late twentieth century ad-vances in mathematics and widespreadaccess to computers, political leadersand other key economic decision-makershave a dangerously deficient understanding of exponential growth. If theoil consumption trend of the century'sthird quarter had continued through thefourth, by the year 2000 oil consumptionwould have reached 127 billion barrels.Proven reserves would have been usedup by 1990 and before 2005 all ulti-mately recoverable reserves would hbvebeen exhausted'

By the mid-seventies oil's low cost,mobility, and versatility had made it thefuel of choice everywhere. Countriesthat did not produce oil imported it. Al-though it had become the principal en-ergy source powering the world econ-omy, and although the growingworldwide dependence on it was pat-ently unsustainable, few seemed to no-tice or take heed. In the United States,automobiles were growing larger eachyear and the number of miles they could

.),

51

e

z

I It

2

(36) State of the World-1984

travel per gallon was dropping everlower. Projections of the world automarket through the year 2000 that weredone before 1979 showed Ole kndustryeasily doubling iti size, erroneously as-sutning that the growth in oil coilsump-tion could continue indefinitely-3\

In retrospect. the world may be heiv.ily indebted to OPEC (the Organizationof Petroleum Exporting Countries) forhaving raised the price of oil. It is easyto criticize the group in the short run.especially the failure of cash-surpluscountries to assist more vigorously thepoorest oil-importing countries. And itWould be naive to overlook the self-interest involved in OPEC's move to ob-tain a better price for the oil of its mem-bers and stretch out remaining reserves.But its oil pricing policy is nonethelesssocially constrictive on the whole. Withreserves shrinking, a socially responsiblepolicy would raise prices just fastenough to encourage the conservationand deyelownent of alternative energysources needed to minimize disruptionin the transition to the post-petroleumera.

iAs of 1984. it s hard to argue that theprice of oil began rising soon enough tomake this smooth transition possible.Prices of petroleum products like gaso-line are still controlled or subsidizedintoo many countries, slowing the adjust-ments that energy consumers can make.Efforts by governments o partly offsetthe price rise notwithr ling, OPEC'srole in raising oil prices will almost cer-tainly be vindicated over time.

SUCCESS STORIES/

Since 1979 world oil consumption hasfallen 3.3 billion barrels, a 14 percentdrop. (See Table 3-1.) There is a distinctpossibility that the 22.9 billion bands of

Table 3.1. World Oil Consumption,Total and Per Capita, 1950-83

Year Total Per Capita

(billion barrels) (barrels)1950 3.9 1.56

1955 5.5 2.01

1960 7.8 2.58

1965 11.4 3.40

1970 16.7 4.541971 17.7 4.721972 18.7 4.911973 20.4 5.261974 19:8 5.00

1975 19.3 4.801976 21.2 5.161977 22.2 5.321978 23.0 5.391979 23.8 5.48

1980 23.1 5.221981 22.1 4.911982 21.5 4.701983 20.5 .0.40sotacts. American Petroleum Institute. Basic Pe-troleum Data BooA (Washington. D.C.: I983); "Mid-year Reciev and Forecast: 011 and Caufournal, July25. 1985; Worldwatch Institute estimates.

oil produced in 1970 will never again bematched. If so, historians looking backfrom the twenty-firsecentury will almostcertainly. see that year as a hinge point in .economic history, a year that signalednot only the eventual fading of the age ofoil. but the beginning of the post-petroleulin age as well,

Given be growth in world populationsince nnickentury, the rise in per capita

consumption was somewhat less thanat of total consumption. Between 1950

and 1970 the average individual's use ofoil climbi.c1 from 1.56 barrels each yearto 5.48 birreli, a gain'of nearly fourfold.Since 197,9, however with world oil con-sumption' declining while the number ofpeople continued to increase. the per

52

I,

Reducing Dependence on Oil (37)

Capita decline has been precipitous. Fall-ing nearly 20 percent in four years; t hasaffected every facet of human existencefrom diets to transportation. The sub-stantial adjustments of the last few yearswill continue for decades to come;

The 14 percent drop in world oil con-sumption since 1979 is impressive, butsome countries have contributed farmore to the decline than others. (SeeTable 3-2.) In fact, a few are still expand-ing their use of oil. Among the largereconomies, the leading Western indus-trial countries und Japan have been themost successful in reducing their oil de-pendence. The centrally planned econo-mies have not done as well, The SovietUnion is the only major industrial coun-

try that, try as.it might, has been unableto reduce oil use.

In retrospect, the world may beheavily indebted to OPEC for hav-ing raised the price of oil.

Somcwhat surprisingly, the countrywith the best record in reducing oil con-sumption is the United Kingdom, theonly major Western industrial countrythat exports oil. U.K. oil use peaked in1973 at 840 million barrels and turneddownward, falling to 606 million barrelsin 1982, 28 percent below its high. The

Year

Table 3 -2. Petroleum Consumption in Major Countries, 1960-82'

United WestUnited King- Ger- SovietStates dom Fran many Japan Union China India Brazil Mexico

"s(million barrels)1960 3.577 343 204 230 241 869 62 60 99 110

1965 ' 4,201 544 398 MS 635 1.318 84 91 120 124

1970 5.366 763 690 88t 1,405 1.934 226 134 186 1821971 5,522 . 763 748 953 1.526 2,427 288 IM 204 190

1972 5.975 818 814 1,007 1,591 2,226 232 154 237 2041973 6,318 840 883 1,066 1,851 2,398 409 166 281 2231974 6,077 781 825 953 1.810 2359 504 168 303 245

1975 5.957 683 781 916 1,642 2,727 577 182 318 2701976 6,373 679 832 989 1.741 2.792 613 188 354 2921977 6.727 686 814 1,037 1,909 2.986 668 201 369 3071978 6,880 675 792 1,113 1.876 3,092 661 225 383 3361979 6.756 704 872 1,121 2,000 3.132 675 241 431 329

1980 6.277 632 825 989 1.810 3,252 668 235 423 4451981 5.826 585 723 891 1.680' 638 389 4851982 5.567 606 712 884 1.565 529

FallFrom 49

Peak (%) -19 -28 -19 -21 -22 -5 -2 -10 ....we Nir

sotracts. U.S. Department of Energy. Energy hanrmation Adminiitration. Internal:end ParolettniAnsitust (Washington, DC.. various years) and 1981 Internal:mud Energy Mutual (Washington. DC.:1982): 1981-82 data arc preliminary estimates by WOridstatch Institute. !Peak year in bold.

I

4

081 . State of the World -1984

other major Western industrial coun-tries have achieved remarkably similarreductions, ranging from 19' percent inthe United Silks and France to 22 per-cent in Japan. Except for France, whereconsumption turned downward rightafter 1973, the peak year was 1978 or1979.

Among the developing countriestrends vary. China, an oil exporter,began reducing oil consumption in1980; India, an importer, has increasedits consumption steadily for the past twodecades. Even since the 1973 price in-crease India's use of petroleum has risenover 40 percent. Although per capita oiluse in India is only a small fraction ofthat in industrial societies? the wisdom offostering this growing dependence onoil, a dwindling resource, is question-able.4

The consumption trends of the twomajor Latin American countries alsocontrast. Brazil, which is an oil importer,has reduced its use sharply since 1979.Indeed, from 1979 to 1981 consumptionfell 10 percent. Oil-exporting Mexico,meanwhile, consumes more and morepetroleum. In 1982 it burned an almostunbelievable 59 percent more oil than in1979.5 Even though Mexico exportsmore oil than it consumes, there aredoubts about the wisdom of continuingto raise its dependence on oil given thecertain knowledge that its reserves willbe largely depleted within this genera-tion.

The 14 percent fall in world oil con-"--'surription between 1979 and 1983 was

achieved partly by substituting energyfrom other sources for oil and partly bysing all forms of energy more effi-

cie The ref ive ntribution of sub-Atiition an on varies widelyby country and by s t In some casesdramatic falls have bee achieved en-tirely as a result of conservation. In oth-ers they are the result of extensive sub-stitution.

THE CONSERVATIONCONTRIBUTION

Oil can be conserved in two waysbyusing it 'more efficiently or by not doingcertain things that consume oil. Insula-tiOnpermits a building to be heated (andcooled) more efficiently. Keeping akitchen list of needed groceries, on theother hand, and thus reducing the fre-quency of incidental auto trips to thegrocery conserves oil by not doingsomething that uses it. In this case, orga-nized information is substituted for gas-oline.

In considering how to conserve oil,the world's transportation system, whichdepends heavily on petroleum, deservescareful attention. And within the trans-port sector, it is the automobile that-dominates. (The future of the automo-bile is discussed in greater detail inChapter 9.) Here it is efficiency that isthe key, since, except for the Brazilianalcohol fuel program and the South Afri-can coal liquefaction program, there islittle immediate practical scope for sub-stituting other fuels for gasoline.

ReCognizing this, nearly all industrialsocieties have established programs andgoals to raise the fuel efficiency of au-tomobiles. In 1978, the last year beforethe second price hike, automobiles com-ing off U.S. and Canadian assembly linesrequired half again as much fuel per mileas those being manufactured in France,Japan, Sweden, and West Germany.Standards set after that by the industrialcountries with the largest auto fleetswere designed to boost efficiency byone-tenth to one-third. With the twocountries that were manufacturing theleast fuel-efficient cars in 1978, namelythe United States and Canada, settingthe highest goals, there was a conver-gence in fuel efficiency standards amongcountries. (See Table 3-3.) Although thedifference's among countries will largely

54

.11

Redwing Dependence on Oil -'!39)

Table 3-3. Fite' Efficiency in Nett Automobiles In Seleett. Industrial Countries,1978 and Targets for 1985

ProjettedGasoline Consumption _Reduction-in-Fuel

Country_ -1985___ Use. 1978-85

(kilometer per liter)'Australia 8.5Canada 7.6France 12.2Japan 11.61

Swedvi 10.91

United kisigdoni 10.0Unitedptes 7

West Germany 10.4

11.811.6

13.712.8

11.011.611.9

(percent)

-28-34-11- 9-10- 9-34-12

ID.0.1fiff 1970.sotatt.L. Internal:4mA Energy Agency. Avorld wt

operation and Development. 1982).

disappear by 1985, the French and Japa-nese, whose 1978 cars_ were already the,most fut.1-efficient, should still maintaina narrow letad.

In 1975. American automobilesburned roughly half the gasoline con-sumed by the world fleet. Raising fuelefficiency in the United States is thus akey to reducing world dependence onpetroleum. U.S. gasoline use peaked at113 billion gallons in 1978; after threedecades of continuous growth, con-sumption dropped some 13 percentwithin five years. Virtually all o'f this wasdue to conservationa combination ofimproved mileage; changes in drivinghabits, including reduction of less essen-tial driving and the formation of carpools; and the lowering of speed limits.In per capita terms the trend was evenmore striking. falling from 515 to 437-gallons between 1978 and 1982.6 This15 percent decline in gasoline use in asociety thought to have a "love affairwith the automobile" was not widely an-ticipated. And its impact spread far be-yond the auto industry (as will be dis-cussed in Chapter 9).

The second area in which conserva-tion has played a major role iti reducing

rter:T Outlook (Parts Organisation for Economic Co-

the amount of oil used is heating. In theUnited States, the use of fuel to beat resi-dential and commercial buildings hasfallen dramatically, particularly since1978. (See Figure 34.) In 1973 theUnited States used an average of 2.23million barrels of oil daily for residentia'and commercial space heating. By 1982,the figure was 1.27 million barrels, a de-cline of 43 percent.? The bulk of thisdrop was due to conservation, but there

MillionBarrelsPer Day

2.0

15

0

0.5sour( Dept Energy

T1952 1960 1970 1980 1985

Figure 3-1. U.S. Residentiel and CommercialUse of Petroleum, 1952-32

w.

ti J

.

(40) State of the WorldI984

has been some substitution of other en-ergy sources. particularly of natural gasand firewood in residential heating. Effi-ciency gains have largely stemmed frominsulation, overall weatherizing, and themore efficient management of heatingsystems in large buildings.

impressive though this gain is in theUnited States. it would have been evenlarger if the country had adopted stihenergy efficiency building codes likethose introduced in France or Swedenduring the law seventies. As with automobile efficiency. heating-fuel efficiencyalso increased in virtually all Western in-dustrial countries.

Souse gains in conservation can bemade quickly7-by reducing speed limitsfor automobiles, for example, or by turn-ing down thermostats. Others involvethe turnover of existing stock of automo-biles. airplanes, or buildings. and takemuch longer. The automobile fleet turnsover almost completely every 10-12years. depending on the country and thedurability of the cars. Housing stockchanges very slowly, howeveroverdecades or generations. Oftentimes ret-rofitting provides a way to shortcut thisvery slow tdruover.

In the United States millions ofIt mes switched from heating oil tow..,od between 1973 and 1983.

A similar situation exists in industry.&m od efficiency gains can be madequickly by modest adjustments in pro-cesses, but others occur over time asequipment is replaced. if the fuel effi-ciency gains embodied in new equip-ment are great enough. the replacementof capital stock wig accelerate.

Although using substitute, mainly re-newable. fuels in developing county -tseems the most realistic way to reduce

oil use, opportunities for energy conser-vation may be at least as great- as mireindustrial world. A 1980 repon fromEnergy/Development International con-cluded that "conservation, a subject notwidely discussed in the context of thirdworld energy policy, appears to be atleast as promising as all the renewabletechnologies taken together in terms ofits capacity to replace projected LDC(less de; _'aped country) oil demand."'

PETROLEUM SUBSTITUTES

While governments everywhere werelaunching energy conservation pro-grams during the late seventies and earlyeighties, a combination of governmentalmandates and market forces fostered abread substitution of other fuels for oil.The substitute fuels, varying by countryand even by region within countries, in-clude the other fossil fuels (coal and nat-ural gas), numerous renewable sourcesof energy, and nuclear power. In somesectors, such as electricity generationand heating, the substitution of otherenergy sources was easy; in others, nota-bly transportation, it was difficult to saythe least.

Perhaps the largest single fuel substi-tution was of coal for oil in the genera-tion of . lectricity. This was a worldwideshift, driven largely by thewide price garthat opened up between the two fossilfuels as the world oil price climbed.After 1979, the energy-equivalent priceof coal was only one-third that of oil.Even with additional expenditures onsmokestack scrubbers by utilities, coalinvariably a dirtier fuelwas still farcheaper.'

The switch from oil to coal in electri-cal generation can be illustrated by thechanges' in the United States. After asteep, decade -long climb. interrupted

56

Muting Drpendente on Oil

only brie fh alto the 1973 oil pine hike.US. oil consumption bs electrical utili-ties peaked in 1978 at 1,74 million bar-rels per do. (See Figure 3-2.) II, 1982.II had dropped 61 percentto 680.000Wads a do.. Within four eais utthtiehad tin oil use oser a million hat t els petday, accounting foi roughly one -third ofthe °serail 3 million bat tel per das dropin U.S. oil consumption between 1978and 1082. Since U.S. nuclear electricalgeneration nu re ased only 2 percent d"r-ing tins period, nearh all the mint. inin oil use tame from the um eased useofcoal. lo

'Fo replace oil- generated eletricus.t ()unities have also been turning to h-droelectunts nuclear power. and 101-ous renewable sours es (which are dis-cussed in :note detail in Chapter 8). Asthe price of oil has climbed. the ThirdWorld has been paructilatly interestedIn lh dropowei as a source of additionalelectrical power. Strong!) supported hsthe World Bank and other internationalagencies, the des elopmem of do-power from both large- and small-st aleprojet is has pint veiled hipidis since1973.'1

on

BarrelsPet 1)1%

0

1a.

I0

.souui toplop

0 5

IOW 191i11 It170 I980 1911 i

Figure 5.2. Petroleum Used by U.S. ElectricalUtilities. 1950-82

(I')

"I he substitution of nuclear power lotoil - generated de( flit us has been wn-t cunt Med in a few industrial countries.namel, those that were he a% depen-dent on this source of clctricits and thathad expanded their nuclear electricalgeneration capacity Oldie major indus-ttial «mmries. mils Fiance and Japansausfs both triteria. Nuclear elethicalgeneration in West Germany. the UnitedKingdom, and the United States is ex-panding slow Is and ;n the Soviet Unionthei e is hide substat.tion of nuclear elec-ts icit for oil. Even thonAa the long-termprospectfor nuleat power is not prom-ising because of high costs (as discussedin Chapter 7), plants that have beenundi. construction over the last 10-15sears have been coming on stream re-cntly.l2

A second major area of substitutionhas been that of wood for healing oa,pan tie Wart, to iesidences. This has beenmost impressive in the United Slates,

heie millions of homes swathed iron:,heating oil to wood between 1973 and1983 to take advantage of the lower fuelprices. A national survey in 1911 in-dicated that 17 million otit of 79 minionU.S. households relied on wood for partor all of their heating .el. Of these, 6.5million relied on wood exclusi%eh. Thisshift. driven b economic considera-tions. is expected to continue for theImeseable h tine., albeit al a slowerpacc.3 3

People are rehing on wood more indeveloping countries as well, but forcooking rather than heating. As citiesgrew and as defOrestation progressed inthe "Third Wolk! from the fifties throughthe seventies, consumers turned to kero-sene as a cooking fuel. After the 1979 oilprice hike. howes er. the price of kero-sene climbed to over $1.00 a gallon al-most vers where. In Addis Ababa kero-sene cost S 1.20 iu 1981; in Islamabad.S1.05: and in Santiago, $1.29. (See'Fable 3-4.)

(42) State of the World-1984

Table 3.4. Kerosene Prices in SelectedThird World Cities, 1981

envPore PerGallon

(dollars)Mexico City 024New Della 0.73Buenos Aires 0 94Islanmbad 1 05

Bangkok 1.10At cra 1 20Addis Ababa 1.20Nairobi 1 20

Singapore 1.21Santiago 1.29Manila 1.49San Salvador 1.58sot Itt.1 I. S Depm tenon of Energy. knergy infor-mation Atimmestr.otoon. 1981 Inknunional Etietg,Anginal (Washington. D C 1982)

With these prices, and with annual in-comes that frequently average only $200per person, the cost of kerosene hasbecotne prohibitive. The demand forfirewood has consequently increasedsharply. Where firewood has not beenal. ailable, consumers have turned to cowdung and crop residues. One unfortu-nate consequence of this particular sub-stitution for petroleum is that the use ofstraw. leaves, stems. and roots of agricul-tura, plants far fuel reduces the son'sorganic matter content, and hence itsproductivity.

World substitution of natural gas foroil Is concentrated in the industrial sec-tot s of the Soviet Union and in the coun-tries that depend on it for fuel. includingparticularly Poland, Czechoslovakia,East Germany, and West Germany. Pe-troleum production is now declining inRomania, once a leading world oil ex-porter, and apparently leveling off in theSoviet Union. so the pressure to developoil substitutes is mounting. With theworld's largest reserves of natural gas,

55

the Soviet Union is not only turning othis fuel domestically but is also expand-ing rapidly its exports to both Easternand Western Europe. Although thecountry rrently has a rather remark-able balance in its national energy bud-geteach of the three major fossil fuelssupplies roughly one-third of total en-ergy consumptionnatural gas is nowmoving into a dominant position. Re-cent Soviet efforts to produce more coalas a substitute for oil, a valued source offoreign exchange earnings, have notbeen very suct essfel,.l4

Within the transportation sector, na-tional stcesses in developing substi-tutes for oil-derived fuels have beenrare. The numerous coal liquefaction,tar sands, and oil shale projects thatwere being discussed or launched in thelate seventies (see Chapter 9) havelargely been canceled, abandoned. orput on hold. There are, however, twonotahle exceptions to this generaliza-tion, as mentioned earlierBrazil andSouth Africa.

Brazil, importing some 85 percent ofits oil, launched a concerted effort in1975 to produce alcohol from sugar-cane. Using a wide range of governmentcredits and other subsidies. the world's;argest producer of sugar has madesteady progress. In 1976 the countryproduced just over 1 million barrels ofalcohol for both industrial and fuel uses,scarcely 1 percent of its annual gasolineconsumption of 92 million barrels. (SeeTable 3-5.) By 1983, industrial alcoholproduction had exceeded 34 millionbarrels per year. and alcohol for fueldisplaced 29 million barrels of oil, ac-counting for roughly one-fourth of auto-motive fuel consumption. With a heavyexternal debt, the pressures to reduce oilimports will continue in Brazil, givingthe alcohol fuels program further impe-tus. Is

South Africa. mindful of its politicalvulnerability at the international level,

Reducing Dependence on Oil (43)

Table 3-5. Sm& Alco1.. Share ofAuto Fuel Consum;dion, 1970-82

e.si Altohol 6,11rie Iota!

AlcoholSkirt.

of 1 ot,11

(million barrel.) (pert elle)

1970 1.1 61.0 62.1 181971 15 66.8 68.3 2.21972 2.6 73 2 77.8 331973 1,8 87.6 89.4 201974 1 1 90.2 91 1 1

1975 1.1 92.0 93.1 1.21976 1.1 92.3 93.4 1.21977 4,0 88.7 92 7 4.31978 9 5 95 3 104.8 9 11979 13.0 986 112.5 12.4

1980 16.3 88.1 104.4 15.61981 19 1 83 3 102 4 18.71982 26.2 85.0 1'12 23.61983 28.6soacts 1970-79 from World Lim. Indoors.The Ennio Decade 1970-S0 (CatothrK:ge. Atm 1141-linger Publishing Co .1982).1980-83 froin Journalof Commeme, April 5. 1983. and Wordnatch tool.tote estroutcs

has made a sustained effort over the kstdecade or so to increase its productionof liquid fuel from coal. Highly successful in this regard. it is now obtainingroughly half its automotive fuel fromcoal.t6

THE ROLE OF PRICE

lie effect oil price rises have on demandis complicated by the impact of concernswith security of supply in both the imme-diate future and the long run. For someoil users,, the sense of vulnerability dur-ing the seventies among those who de-pended heavily on oil led.to a search forsubstitutes. For others, the dramatic oilprice hikes spurred the reduction in oiluse.

How last the demand for a commodityfalls as its price rises depends on whateconomists describe as the price elastic-ity of demand. This in turn is infltiencedby the availability of alternatives, includ-ing. in the case of oil. the cost of' conser-vation. For petroleum, the ilmiency of-spot' or shorttertn prices to rise wellabove the cont:act price for oil duringtimes of international shortages indi-cates the inelasticity of demand in theshort gun.

The price of oil over the longer termhoul be seen both in current anu real

prices-that is, the price after adjust-ment for inflation. In current terms, thepostwar oil price reached a low of $1.28a barrel in 1969 and a high of $33.47 in1982. (See Table 3-6.) Yet this greatlyoverstates the real price change becausethis was a period of record worldwideinflation.

Using the International MonetaryFund's consumer price index (1975equals 100) to adjust for inflation revealsa somewhat different trend, In realtems, the postwar price of oil bottomedin ;970 at $2.09 a barrel. It increased insix Gr the next ten years and reached ahigh of $16.48 in 1980-almost exactlyeight tiriP..1 the price in 1970. Adjustingthe price of oil for inflation mveals an-other line:resting, often overlookedtrend. Although current oil prices de-creased only slightly from 1951 to 1969,,the real price of oil fell by some 61 per-cent, providing an irresistible economiclure to all countries. bot: industrial anddeveloping.

As a rule, oil-exporting countries havechosen not to raise the domestic price ofpetroleum products to keep pace withthe world oil price. In effect, they aresnbsidizing their own consumption of oilwith income from the much higher ex-port prices. Among the more extremecases is Venezuela, which had a retailgasoline price in 1981 of 130 a gallon.'?Such a low price could lead to an exag-

..

(4-1) Stale of the World-1984

Table 3-6. World Price of Petroleum,Current and Constant Dollars. 1951-83

liar Current' Constants

01011;11.1, per barrel)

1951 1 71 5.38 - :1955 1 93 5 0.1

1960 1 50 :1.71

1965 1.33 2.71

1970 1 30 0.091971 1.65 2 501972 1 90 2 721973 2 70 3.531974 9.76 11.06

1975 10.72 10 721976 11 51 10.351977 12.40 10.01

1978 12.70 9.41

1979 16 97 11 25

1980 28 67 16 481981 32.50 16,381982 33,47 , 14.9519833 29.60 22.22

1 For Saudi ATAUll Crock pi ( c41 at ILK 1.1noralic..th ul.ncti nun% IMF icicle% of minnow pin rsbawl on 1975 etpullittg 1(10 ,Prelaninansum I. International Monct,trt Fund, lionthh Ft.two tat Stamm c IWAslungtort. 1) C nionth1.1

Berated dependence on the automobile,which would be to the country's detri-ment over the long term.

Within importing countries, theCarter administration's docisiou to re-move controls from U.S. oil prices, an-nounced in April 1979. was certainly thepolicy change with the greatest effect onworld oil consumption, Oil price con-trols were to be phased out over 30months, although the Regan administra-tion removed, the last of them in Febru-ary 1981. thus compressing the processinto less than two years. This undoubt-edly dramatized the price rise. thus fur-ther encouraging conservation and sub-stitution.

In Canada, too, the price of oil wasbelow the world market. But in this caseit was much more of a political issue,leaving the government reluctant to per-mit Canadian prices to climb too far.Vie Canadians have instead adopted ahunpromise that lets oil prices rise, butnot to the world level."

In several countries, the tax on gas-oline now exceeds the cost of thefuel itself.

Some governments have used taxes todiscourage consumption of petroleumproducts, particularly gasoline. In sev-eral countries, including Argentina. Bel-gium, the Netherlands., South Korea.and the United Kingdom, the tax on gas-oline now exceeds the cost of the fuelitself. According to the latest interna-tional compilation. South Korea, wheregas costs 39.00 a gallon. and Ghana, at$3.63 a gallon. were among the highestin the world. (See Table 3-7.)

In the Third World, where keroseneconsumption often exceeds that of gaso-line, governments have attempted to re-strain the increase in prices. Becausekerosene is the principal cooking fueland thus a consumer staple for low-income groups, some governments(such as in Sri Lanka) have raised theprice of gasoline well above the marketprice, using the added revenue to subsi-dize the price of kerosene."

GOVERNMENT REGULATIONAND INCENTIVES

Perhaps the easiest way to reduce depen-dence on oil would be to permit market

60

Reducing Dependence on Od (45)

Table 3-7. Gasoline Prices in Selected Countries, July 1981

CountriGasoline

Retail PrueGasoline

Tax

TotalRetailPt tee

(*.outlinesWhere 'Fax

Exceeds Price

(dollars)Solidi Korea 1.77 2.29 4 06 X

Ghana 357 0.06 3.63Belgium 1.27 1.44 2.71 xUnited Kingdont 1.26 1.36 2.62

Sweden 1 39 1.22 2.61Japan 1 66 0.891Ken9 1.71 081 2.55Netherlands 1.24 1.23 2.49 X

India . 1.46 0.991 2.45South Mina 1.26 0.94 2.20Ethiopia 1.93 0.23 2.18Argentina (1.52 0.77 1.29 X

United Slates 1.12 0.13 1.25Colombia 0.20 0.61 0.81 XMexico 0.29 015 0.44Venezuela 0.12 0.01 0.13

a Plus :1.5 percent % alue-added tax.SOUR(.1 . U S. Depe run tin of En erg% Keterto Information Adnnmstrat eon. 19111 Internaitanal enog,.intout1 (Washington. D C 1981).

trim 7 percent % dine-added tax.

forces to make the adjusttnents. but un-fortunately ntarkets are imperfect andoften shortsighted in behavior. Theirshortcomings can frequently be over-come by government regulations or theuse of financial or fiscal incentives. suchas the taxes described in the previoussection. These policy tools can be usedboth to conserve oil and to encouragethe substitution of cheaper. sustainablesources of energy.

Many governmental regulations aredesigned to increase energy efficiency.making it difficult to single out thoseaimed specifically at increasing the effi-ciency of oil use. One area in which themarket does not always perform well isin reducing oil use in the residential/commercial sector. Oftentimes buildersand potential occupants of buildings,both residential and commercial. have

conflicting Interests. Builders are inter-ested in minimizing construction costs.since price is an important marketingtool. Occupants, however, are interestedin lowering fuel bills. Yet be :ause own-ers and renters often change frequently,their interest in thermal efficiency is notvery strong. Getting governments to es-tablish energy efficiency standards forbuildings is thus important."

The northernmost industrial coun-tries have been particularly active in thisarea. In 1977. for example, Swedenpassed a building code requiring a ther-mal efficiency nearly double the nationalaverage of buildings constructed before1970. Although these new standards areonly about 20 percent above the thermalefficiency of homes actually being builtin 1977, they are nonetheless playing animportant role in increasing the thermal

Cl

(.16) State of the World -1984

efficiency of die Hill lotted building stock.Denmark passed a building code in 1079that also provided for a far more strin-gent thermal efficiency than the stan-dards voluntarily followed by huilders atthat time.21

Because both residential and conuner-cial buildings arc replaced so slowly. so-cieties also have att interest in retrofit-ting existing structures. Canaja'snational energy program, adopted inOctober 1980, includes federal grants ofup to $500 to help (rioters insulate theirhomes. The government of the UnitedKingdom provides grants up to £50 forinstalling home insulation. Anotherwidely used governmental interventionto reduce fuel use is the adoption ofmaximum building temperatures in win-ter and minimums in summer. In somecases, such as in France, these tempera-tures arc mandatory in commercialbuildings, and government tnonitorsperiodically check for compliance, Inother countries they arc voluntary butwidely adhered to; these governmentsrely on example and exhortation to re-duce oil used for space heating.22

The market also fails to raise energyefficiency in multifamily apartmenthuildings where heating and cookingfuel and electricity arc bulk-metered forthe building as a whole, thus providinglittle incentive for individual occupantsto conserve. One remedy for this, whichhas been adopted by many governments.is simply to require that apartment unitsbe mete§ ed individually.

Energy efficiency standards can be es-tablished for household appliances aswell as for houses themselves. ht an En-ergy Conservation Law passed in Octo-ber 1979, Japan set rigorous standardsfor refrigerators, air conditioners, andlesser appliances." In some cases a com-bination of regulation and market forcescan be effective. Some governments sitn-ply require that the energy efficiency ofan appliance he clearly stated on a label.

----., .

62

This provides consumers with informa-tion needed to minimize energy con-sumption while responding to marketsignals.

Sometimes government regulationsor incentives arc useful when the mar-ket does not respond quickly enough,such as in the transportation sector. Inaddition to the adoption of fuel effi-ciency standards discussed earlier, mostgovernments of industrial countrieshave lowered speed limits for automo-biles. West Germany, where motoristsstaunchly resist such limits, is a notableexception.24

Governments have also relied onregulations and financial incentives toencourage a switch from oil to lessscarce, less costly fuels. Australia, for ex-ample, has provided tax concessions toindustry for conversion from oil-firedequipment. Canada's 1980 energy pro-gram authorized grants to homeownersand businesses to convert from oil-firedheat to alternatives, The Japanese Gov-ernment provides low-interest loans forthe purchase of solar panels to heatwater. And the United States providesnonrefundable income tax credits up to$4,000 for homeowners who install solarheating equipment.25

Brazil. as noted earlier, has perhapsgone furthest in encouraging the shutfrom oil to alternative energy sources. Inaddition to using subsidies to encouragethe substitution of alcohol for gasolineas an automotive fuel, the Brazilian Gov-ernment is also encouraging the chemi-cal industry to switch from petroleumfeedstocks to alcohol 26

In centrally planned economics,where the market's role is limited, themultiyear development plan itselfbecomes the central instrument-for re-ducing dependence on oil. For example,in the Soviet Union's eleventh Eke-YearPlan (198I -85), reducing dependenceon petroleum depends heavily on thesubstitution of other forms of energy,

'

Redwing Dapendence on 0:!

especially of mu fear power for oil inthermal electrical generating plants.During this period. nuclear power was toprovide all the growth in electricits inthe European Soviet Union. but its de-velopment is lagging hadly .22

A most: to Soviet industrial boilet son coal is not working well either, largelyhecause coal. production has fallenbelow the plan's target every year since1976. As a result. &MCI dependence onoil had not declined at all as of 1981.While other industrial countries havemosed vigorously away from oil In elec-trical generation, it still figures promi-nently in the Soviet Limon. accountingfor close to one -fifth of the country'stotal oil use.29 .

The ponderous Soviet planning bu-reaucracy scents particularly ill equippedto make quick course corrections or toread the changing international scene.Soviet planners placed emphasis on oil-intensive technologies and supply agree-ments just as Western countries weremoving away from oil dependence. mak-ing the eventual change to substitutefuels even more abrupt.

Conservation. too, has proved espe-cially difficult in centrally plannedeconomies. though the potential andeconomic rationale for saving energy ap-pear to be as great as in the West. Incontrast to Soviet efforts to phase outod, which depend on the government'sown plan. conserving oil depends on behavioral changes by plant managers andindividuals, and these in turn dependupon exhortation. something to whichthe typical So% let citizen has hecomerather inured. Desired changes in thisactivity may come only with economicliberalization. Czech energy analyst 1st-On Doboxi. citing a Soviet source that"with sharply rising production andtransport costs for additional output.per energy unit. conservation costs littlemore than half as much as new sup-plies." concludes that the major source

147)

of comers anon in the Eastern bloc is ec-onomic reform.29

China. on the other hand, is muchmore adept at adjusting the energy mixquickly. After many years of rapidly ris-ing oil consumption. the governmenteffectively and rather abruptly resersedthis trend in 1979 in order to free up oilfor export. Oil, use is being reduced inChina by converting to coal in both elec-trical generation and in industrial uses.99

The experiences of centrally plannedand market economies demonstrate thewisdom of relying on the market wher-ever possible to reduce energy con-sumption. But one reason market econo-mies, in industrial as well as developingcountries, have been much more suc-cessful in both conserving oil and switch-ing to alternative sources is that theyhave been ahle to effectively combinethose market forces with governmentregulations and incentives.

THE OIL INTENSITY OFECONOMIC ACTIVITY

With oil consumption declining eachyear since 1979, the world is far less de-pendent on oil today than it was duringthe late SCV1;11(iCS. Obviously. as CCQ-I101111C output expands and oil consump-tion declines, the oil intensity of eco-nomic activity declines even faster.

Ever since the first oil price hike, en-ergy analysts have focused on changes inthis ratio of energy to gross nationalproduct (GNP). As the world is runningout of oil but not of energy. the oil inten-sity of economic activity is particularlyimportant. The amount of oil requiredto produce $1.000 of gross nationalproduct has varied widely among'couti-t ries, from a low of roughly one harrel orless in China and India to a high of five

63

(48) State the 'Siff 1d-1984

bar'rels in the United States at the peakof the oil age. (See Table 3-8). Over thepast generation the United States hasbeen by far the world's most oil-inten-sive.economy. using easily twice as muchoil per $1,000 of GNP as Japan, the So-viet Union, or the United Kingdom.

An abundance of low-cost indigenousoil fostered this U.S. dependence, whichthe other Western industrial countriesand Japan were able to resist because,except for the United Kingdom in recentyears, they had to impon most of thepetroleum they used, Now this too hasbegun to change. Between 1977 and1982 the United States reduced its de-pendence on oil from just under five bar-rels per $1,000 of gross national productto just under four barrels,

Othet major Western industrial coun-tries and Japan have done at least as well

as the United States in reducing the oilintensity of their economic output overthe last several years. The Soviet Union,however. which has had to rely on eco-nomic planning to move toward otherenergy resources and onsexhortation todecrease oil use, has been remarkablyunsuccessful. Indeed, the oil intensity ofSoviet economic output continuedclimbing through 1980, the last year forwhich data are available.

The trends within developing coun-tries are less consistent. India, which re-lies heavily on coal in its industrial sec-tor, has a relatively low use of oil per$1,000 of GNP. But its oil intensity in-creased throughout the seventies, reach-ing a historical peak in 1979. Althoughfollowed by a modest downturn in 1980,the Indian performance did not begin tomatch the decline of one-fifth between

Table 3-8, Oil Intensity of Gross National Product in Major Countries, 1960421

Unitedrotted King-

l'e.tr States (loot

WestGer-

Pr.ma e mans japanSovietUnion Giulia India Brazil Mexico

els of oil tbed per $1.000 ol GNP)1960 4.95 1.82 0 98 0.75 1.11 1.52 0.36 0.38 1.27 2.06

1965 4.60 2.47 1.45 1.50 1.82 1.81 0 38 0.50 1.24 1.67

1970 5.03 3.06 1.93 1.82 2.36 2,05 0.73 0,58 1.33 1.761971 5.03 2.98 1.99 1.90 2.45 249 0.86 0.66 1.28 1.771972 5.11 3.12 2.04 1.93 2.35 .24 0.95 0.67 1.34 1.771973 5.11 2.97 2.10 1.95 2.51 2.25 1.04 0.69 1.39 1.801974 4.94 280 1.91 1.73 2.48 2.31 1,23 0.69 1.36 1,871975 4.90 2.47 1.80 1.70 2.20 2.42 1.32 0.69 1.35 1.981976 4.98 2.37 183 1.74 2.92 2.38 1.41 0.70 1.38 2.091977 4.98 2.36 1.74 1,78 2.31 2.46 1,42 0.70 1.38 2.131978 4 88 2.95 1.64 1.84 2.16 2.47 1.26 0.75 1.35 2.181979 4.69 2.32 1.73 178 2.18 2.48 1.20 0.83 1.42 1.98

1980 4.36 2.12 I .63 1.54 1,89 2.54 1.13 0.78 1.29 2.481081 4 911982 3 98

'Peak sear in hold.so, act Oil konstomplusit data Irtmt1: S Deportment ol Ettergs. tamp, Wm maim) Adntitustrmion,1482 Aimed Limp Re my (Washington. I) C.. 1983). GNP clam tio 1980 dollars) from Herbert Ritifx Am/km /Wm/ Hi 1980 3 Creolove Pause! 0 C S Dep.trtiocitt of State.1981)

64

Reduring Dependfnef on (h1

1977 and 1980 in the oil intensity ofChina's gross national product. Ironi-cally India. an oil importer, becamemore oil-intensive while oil-exportingChina was steadily reducing its depen-dence on petroleum.

Within Latin America the situationwas more predictable. Mexico. a leadingoil exporter. raised toil content of itseconomic output rather steadily, reach-ing nearly 2.5 /barrels per $000 of

reach-ing

from the preceding year.inten-

sity of economic output increased stead-ily from 1950 to 1973. going from 1.33harrels per $1.000 of GNP to 2.27bands. (See Figure 3-3.) The In° oilprice adjustments during the seventieslaunched what seems certain to be thebeginning of a long-term historical de-

l'eg SUNNI

III

.5

Figure 3-3. Oil Intensity of World Economic

1 5-.......,...,

ip-

Ou pin

Noels

For the world as a whole, the oil inten-

195n 19ho

Output. 195043

%,00,e1 .10,es PeirolonnIna , Per ril Ws

197(1 1980 19$1j

puzduct in J80- --well above all theWesrernitfdustrial countries except theUnited Sv.tes. Brazil. meanwhile. main-tained a fairly cieady level of about 1.3barrels during the seventies. A conibina-UM Of substitution and conservationpet inured Brazil to initiate a downturnin the oil content of its economic outputin 1980. reducing it by an impressive 9

(49)

(line in the oil intensity of economic ac-Urn.. Since 1979 the fall has heen bothsteady and substantial. dropping oil useper $1.000 of gross world product to1.74 harrels.

THE OIL PROSPECT

Future oil consumption will he in-fluenced by constraints on supply as wellas demand. Supply-side constraints arehoth geological and political. while de-mand considerations involve foreign ex-change at the national level and purchas-ing power at the individual level.

On the supply side. production haspeaked and is declining in a number ofoil-exporting countries. The hig threeproducersthe United States. the So-viet Union. and Saudi Arabiaillustratethe range of production possibilities.U.S. oil production peaked in 1970 anddeclined steadily until the late seventies.when there was a modest increase. (SeeFigure 3-4.) As a result/of the frenzy inoil drilling and prod4ction associatedwith the two oil price hikes and thedecontrol of oil prices in the UnitedStates, production has held steady since1978 at 8.6 million harrels per day. amillion harrels less a day than in 1970.31Once thus bolsi of activity associatedwith rising oil prices has passed. U.S. oilproduction is expected to resume thedecline it started in the seventies.

The big push in Soviet oil develop-ment is historically recent, most of it oc-curring since 1970. The steep growthfrom 1960 to 1980 reflects the all-outeffort by Soviet leaders to develop theiroil resource. both as a major internalfuel and also as a source of hard-cur-rency export earnings. Although theSoviets would like to expand productionfurther. the decline in the all-importantrent:ryes-to-production ratio that slowed

5

(50)

MillionBarrelsPer Dar

13

10-

5

State of the WorldI984

to turn downward within a few years,substantial future output increases areexpected in only a few countries, notably

. China and Mexico."Oil production declines in some coun-

tries, such as the Soviet Union, are dueto a decline in the reserves-to-produc-tion ratio that makes it physically impos-sible to continue to boost production.Elsewhere, notably in some of the mem-bers of OPEC., production is being .re-duced to suppoi:t the world price of oil atan agreed level. Political lisruptions,particularly in the Middle foss, are alsoinfluencing production levels: And somegovernments, such as Saudi Arabia andNorway. are influenced by a "depletionpsychology," a desire to stretch out theincome from oil exports over a longerperiod. This attempt to postpone theday when the wells go dry could steadilylower world oil production in the lateeighties and nineties. The market impactof the basically healthy fear of using upan irreplaceable resource is hard togauge. But just as the changing marketpsychology drove prices up in the seven-ties, the emergence of a strong depletionpsychology could markedly reduce oilproduction below the levels commonlyprojected for the remainder of this cen-tury.

United States

ScotetUnion

Sourrt. 101 Erstrg, Aglow)

195 0 111i0 1470 1980 1985

Farm 5-4. U.S. and Soviet Oil Production,1950.85

growth in output in the early eighties islikely to lead to a decline in the late eight-ies and nineties, barring some unex-pected major oil field discovery. It is thisdifficulty in expanding oil output. com-bined with the failure to increase coaloutput according to plan, that has led tothe Soviet Union's crash progqm to de-velop its vast gas reserves."

Of the major oil producers, only SaudiArabia has enough reserves to markedlyraise output beyond previous peak levelsif market conditions warrant it. Whetherthe Saudis choose to produce at full ca-pacity is another matter, however, sincethey have served as the residual supplierwithin OPEC and have sometimes sin-gle-handedly supported OPEC's oilprice through deep production cuts.

This range of future production pos-sibilities also characterizes the situationin other oil-producing countries. al-though more appear to be like theUnited States than like Saudi Arabia. Forexample, production ;n Venezuela hasfallen nearly 40 percent from its 1970high of 3.7 million barrels per day.Other major producers experiencingmore-recent declines include Algeria.Iran. Iraq, and Kuwait. With productionof the major North Sea exporters, theUnited Kingdom and Norway, projected

.,

. 1. 6

The combination of geological, eco-nomic, and psychological factors islikely to place end-of-century oiloutput well below the current level.

All these uncertainties arc enough tohumble even oil experts who attempt topredict tomorrew's production levels.Nevertheless, common sense suggeststhat to extend petroleum's lifetime, pro-duction in the near term should fall. Thekey question is whether the long-term

.

Reducing Dependence on Ott , (5i)

petroleum well below the cost of oil pro-duced from tar sands in Canada. A Cana:dian survey of eight projects that wereoriginally scheduled to start productionbetween 1980 and 1990 indicates an av-erage production cost of $52 per barrel.U.S. oil shale and coal liquefaction proj-ects designed to produce liquid fuelshow production costs consistentlyabove the projected world price 6:ir con-ventional <41 at least through 1990,1

Beyond price, future oil consumptionwill be determined by changes in per-sonal income. Given the slowdown inglobal ealitomic growift since 1979, it isby no means certain that thr affluence tosupport oil - consuming habits, whetherin the form of automotive fuel, cookingfuel, or otherwise, will increase apprecia-bly. Unless real incomes rise faster thanthe projected rise in real oil prices. the

'scope for expanding oil consumptionwill be limited.

At the national level, mounting exter-nal debts in a number of Third Worldand East European countries are makingit more difficult to import oil on the samescale as in the past. In country aftercountry where the International Mone-tary Fund has had to intervene withemergency loans and has mediated debtrescheduling with private banks, sub-stantial increases in petroleum productprices have been required as a conditionof the loans. This is especially true forgasoline in countries such as Brazil andMexico. Yugoslavia, in order to avert anunmanageable increase in its interna-tional debt, introduced gasoline ration-lug. Poland, far in arrears in paymentson its international debt, also rationsgasoline."

As the age of oil slowly recedes, gov-ernments everywhere will be faced withdifficult choices in the use of dwindlingsupplies. In industrial societies the ques-tion may eventually become a choice be-tween public and private transportation,with the more efficient rail system ex-

decline in world output will be gradualand orderly or irregular and disruptive.lie combination of geological, eco-nomic, and psychological factors is likelyto place etid-ol-century oil output wellbelow the current level. Although a con-tinuation of the 5 percent annual declinefrom 1979 to 1982 is obviously unlikely,a further drop, perhaps a total of 15 per-cent, between no and the year 2000seetns entirely possible, given the outputdeclines now under way in most produc-ing countries. This would put end-of-century world oil production at 16.3 bil-lion barrels per year. down from 22.9billion barrels in 1979. If projected pop-ulation increases also materialize, pro-duction will fall to 2.6 bards per per-son. (See Figure 3-5.) In effect, eachperson will then be using only half asmuch oil as at the peak of the oil age.

Out thedemand side, the price of oilwill be the dominant influence on con-sumption. In its 1983 world oil priceprojections, the U.S. Department of En-ergy's middle scenario projects a rise inthe price of oil to $57 per barrel in realterms in 1990. This projected rise inprices still leaves the long-term price of

BarrelsPer Person

6

4

2

Sowers. Awn Parttime, but.;Untied Nations; Worldwakh

1950$

19(10 19'70 1 80 11;90 2000

Fipte 34, World Oil Production Per Person,195043, With Projections to t000

67

(52) State of she Wm Id-1984

panding at the expense 40d-dependent,road transport. For many Third Worldcountries still in the early stages of de-velopment. the adjustments will come inthe form of conditions imposed by theInternational Monetary Fund and WorldBank in exchange for continued financ-ing of development. Increasingly, ThirdWorld governments will have to choose

between fuel for private automobilesand fuel for cooking, or whether to useprecious gasoline in cars or in irrigationpumps and tractors. Unless govern-ments develop policies that channelscarce oil supplies to the most essentialuses, affluent Motorists could easilyoutbid farmers,

'-.Ii-I:

4

Coriserving SoilsLester R. Brown

Between 1950 and 19'75 the world de-mand for grain douhled. spurred byboth population growth and rising afflu-ence. It will double again by the end ofthe century if the projected growth inpopulation and income materializes.This unprecedented quadrupling inworld food demand within 50 years isputting more pressure on many of theworld's soils than :hey can sustain,

In the face of this continuously ex-panding world demand for grain and the..ssociated relentless increase in pres-sures on land. soil erosion is accelerat-ing. In effect, mounting economic prls-sures are degrading the resource base.Itt 1080 Anson R. Bertrand. a seniorU.S. Department of Agriculture officiai,described the situation in the UnitedStates: The economic pressuretogenerate export earnings, to strengthenthe balance of payment.;, and thus thedollarhas been transmitted more orless directly to our natural' resp...cebase. As a result, soil erosion today canhe described as epidemii. in propor-tion."' Bertrand's linkage between eco-nomic pressure and resource deterio-ration applies el- here as well; in

,st countries, 'le demandpressures comet sa igenous rather

C

than foreign sourcps.Grave though the loss of topsoil may

be, it is a quiet crisis, one that is notwidely perceived. Unlike earthquakes,volcanic eruptions, or other naturaldisasters, this humanmade disaster is un-folding gradually. It is not always widelyrecognized because the intensification ofcropping patterns and the plowing ofmarginal lands that leads to excessiveerosion over the long run can lead toproduction gains in the short run, thuscreating the illusion of pros ress and afalse sense of food security.

Although soil erosion is a physical pro-cess. it has numerous economic conse-quences. affecting productivity, growth,income distribution, food sufficiency,and long-term external debt. Ultimately,it affects people. When soils are depletedand crops are poorly nourished, peopleare often undernourished as well.

THE CAUSES OF SOILEROSION

The apparent increase in soil erosionover the past generation is not the result

C3

4

(50 Stair of the florid 198.1

of a decline in the skills of fainters butrather of the pressures on farmers toproduce more. In an integrated, siorldfood economy, the pressures on land re-sources are not confined to particularcountries: they permeate the entireworld. Many traditional agricultural sy s-terns, that were ecologically stable as re-cently as mici-century. when there wereonly 2.5 billion people in the world. arebreaking down as world populationmoves toward 5 billion.

Over the millennia. as the demand forfood pressed against available suppliesfarmers devised ingenious techniquesfor extending agriculture onto land thatwas otherwise unproductive while stillkeeping erosion in check an:I maintain -lug land productivity. These techniquesinclude terracing, crop rotations. andfallowing. 'Today. hind farmed throughthese specialited techniques still feedsmuch of humanity. Although these prac.-1

' aces have withstood the test cif time.they are breaki 4 down in some slum-thins under the pressure of continuouslyrising demand.

Iii mountainous regions such as thosein Japan, China, Nepal. Indonesia. andtit . Andean countries, con aruction ofterraces historically permi.ted farmersto cultivate steeply sloping land thatwould otherwise quickly lose its topsoil.Centuries of laborious effort are embod-ied in the elaborate systems of terracesin older settled con cries. Now the grow-ing competition for cropland in many ofthese regions is forcing farmers tii theslopes at a pace that does not permit thedisciplined construction of terraces ofthe sort their ante ,tors built. when pop-ulation growth was negligible by com-fwison. Hastily constructed terraces onthe upper s-, i.es often begin to give way.These in t.i. n contribute to landslidesthat sometimes destroy entire villages,exacting a heavy human toll. For manyresidents of mountainoui areas in theHimalayas and the Andes, fear of these

landslides has bee me an integral part ofdaily 16..2

Researc h m Nigeria has shown howmuch more serious erosion can be onsloping land that is unprotected by ter-races. Cassava planted on land of a I

percent slope lost an average of 3 metrictons per het tat e each year. comfortablyoelow the rate of soil loss tolerance. Ona 5 percent slope. however, land plantedto cassava eroded at a rate of 87 tons perhectare annuallya rate at which a top-soil layer of six inches would disappearentirely within a generation. Cassavaplanted on a 15 percent slope led to anannual erosion rate of 221 tons per hec-tare, which would remove all topsoilwithin a decade. Intercropping cassavaand corn reduced soil losses somewhat,but the relationship of sod loss and sloperemained the same.3

Much of he decline in inherent soilfertility that occurs under rowcrops is being masked by advancesin technology.

Throughout the Third World increaseing population pressure and the ac-celerating loss of topsoil seem to golaud in hand. Soil scientists S. A. Id-Swaify and E. W. Dagier have observedthat it is in precisely those regions withhigh population density that "farming ofmarginal hilly lands is a hazardous ne-cessity. Ironically, it is also in those veryregions where the greatest need exists toprotect the rapidly diminishing or de-grading soil resources." It is this viciouscycle, set in motion by the growinghuman demands for food, feed, fiber,and energy, that makes mounting aneffective resp se particularly difficult:*

In other parts'of the world farmershave been able tr, cultivate roiling land'

Convening Soliv (551

without losing ex( essn e amounts of top.soil IA using crop rotations. I'spa al 01these iegions is the nulls% estem tintedStates. Miele Linnet s tadimmall usedlongtet icitaiimis 01 ha). pasture. andtom. Fields planted HI Toss craps. suchas coin. are most sus( (pubic to erosionBs alternating row (tops with cowlrops Itke ha, the as erage animal rate Of

soli erosion was kept to a tolerable level.Not only do crop rotations provide moresoil «n et. ben the amount of of gam(matter that binds sod particles togetherremains much higher than it wouldunder continuous row (Topping.

As woo Id demand for U.S, feedstuffssowed Ale Wm ld War II and as cheapmit ogen tenth/et reduced the need forlegumes. Slum an filmier, throughoutthe Midwest the lowei Mississippi Val-les. and the Southeast abandoned clopmullions to glow coin Or sosheallstintions1). The risks associated with thisshift ,m cropping !mums have longbeen known. Research undertaken InWow's dting the thirties showed anInc tease in on erosion from 2.7 tons perau t. (1 acre itials 0.4 hectares) annuall) when land was in a cm (i-uheat-closer notation t(. 19.7 tons per 3erwhen the sante land was planted con-tinuous!) to cora. (See Table 4-1.) Thelowei rate is within established erosion

Table 4-1. Cropping System, andSoil Erosion

.1%(1.1ge AmamiClopping S stem 1.0%. (pi Son

(ion /moo(:rn. wheat. doled

thwer I citationCoationious wheatContinuous (0111

9 7

10

19.7

sot in i NI F Slille t. -(.r.opiong In Et.).sun( Control. Mossenni Experniient Si.innot ttulIcon 566 1 1936). re prinitll in N.iitothil .gtn &analLind% Studs. .seni Pren:rlaiton Pant. on .letirtilluia1Preultittrvill IWdslosigton. I) ( 191401

tolet ante les eh. whereas the higher ratewould lead tti the lost of one inch oftopsoil in less than a decade. Much of thedecline in inherent soil lruht that o-c under row crops is being masked byadsances in technology. particularly bi11* Increasing use of chemical renal/Tr.

Fallo-wing has permitted tanners towink the land hoth in semiarid regionsand in the tropics. where nutrients arescarce. In vast semiarid areassue h asAustralia, the western Great Plains ofNoi tit America, the Anatolian plateau ofTurke). and the drylands of the SovietUnionwhere there is not enough mois-ture to support continuous cultivation.altemat -vear cropping has evolved.Older tins system land is left fallow with-out a cover crop every (* }ter year to ac-cumulate moisture. The crop producedin the next smith, draws on two years ofcollected moisture.

In some situations this practice wouldlead to serious wind erosion if strip-cropping were not pcacticed simultane-ously. Alternate strips planted to cropseach year serve as windbreaks for thefallow strips. This combination of fal-lowing and strip-cropping permittedwheat production to continue in thewestern U.S. Cleat Plains after (tie DustBowl years.5

Rising demand for food has reducedih alert fidloed in kes drsland farmingregions. As world wheat prices chnihedsharply during the mid-seventies, U.S.summer fallow land dropped from 17million hectares in 1969 to i3 millionhectares in 1974.6 This decline ledKenneth Grant. head of the U.S. SoilComeevation Soviet., to warn farmersthat severe until erosion and dust bowlconditions could result. He cautionedlarmers against the lure of record wheatprices and short-term gains that wouldsactifice the long-term productivity oftheir land. 0) 1977. die National Re-sources Inventory showed that wind ero-sion in wheat-growing states such as

1

t 56p Slate of the Wodd-198.1

I otos and (.oiotado fat exceeded thetolet ce loci...7

At te same time, the amount of fal,lowed land m the Scniet Union was ails)being minced Dining the late sixtiesand carp sennes. the Stmt.'s woecotelstentl% fallowing 17-18 mdhonheciates each seat in the chland le-glow Rut alto the massne c top shot I-fall and heirs % imports of 1972. the 'al-lowed area was t educed bs one-thin!. Ksthe coil% eighties SOS 10 011'16.11S 14 (4 e

um nun e land to fallow in an dim tit) lesion. land pto-itunsits.s

In the now( sstich as pal is of Ali icasouth of the Sabato. Venezuela. the Am-azon liasni. and the onto islands of lit-&mowfallow nig is used to remote thelet ulit% of the soil, lit these oleos moreMA111'131% al t!St01 ell m segetation than inlite soil. When cultisated and stripped ofi hen dense % egetatn e «net, soils of thehumid tropics gun 1.1s lose then !mins.lit iesponse to these conditions, fanners'lase ohed a system of shifting (tilln.1-11011' 1 he% cleat and ci op land fot two.duce. 01 possibly lout seats and thensstematualls abandon it as crop s ladsdecline. \alma' segetatio I soon takesmei the abandoned field. Musing on to!resit tel fat :nets i (eat the process.When these cultivators return to theirstarting point alter 20-25 sears. the soilhas legality(' enough !et Wits 10 supportc top pt oduction icn a lots seals.

Mounting population piessuies in thetropics are lofting shifting culti% atm% toshin ten these totation (sties. As tinshappens, land productivity falls. A 1974%Volk! Rank studs teported that m Nig-el la "tallow periods under slating c uht-%anon base beanie too short to restorelertilits in some areas." In some localesthe in iganal cropping csde of 10-15seals has ahead% been reduced to r;

Sim e 1950. the (Topped area in Nigeriahas multiplied 2.5 times as nos land.lam gels marginal, has been added andfallow ( %des hose been shortened. fo-

gethet. these two trends hose offset thegains from the increased use olchomeallerttlizer. the adoption of improved % or-telies. and the expansion of irrigation.Cereal s tads .tre no higher than theywere in the early sixties.

As population pi essure has intensifiedin tile I is er floodplains of northern '1 hat-land cner the last few decades. rice farm-ers base migrated to the nearb% uplandswhere dies practice rain-fed cropping.Earls migrants adopted a 'slash andburn" %%stem with a cycle of eight to tenseats. w:Itich seemed quite stable. As tni-grat ton has «mimed. ['owner, the for-est fallow csde has been -tortened tobetween two to four sears in mans arc as.In analszing this situation. John M.Schiller concluded that "soil erosionproblems all: becoming c 'earls manifestin some areas and the effect of increasedninon is causing increased flooding inthe low lands and the siltation adorns. Apotential's set-, unstable physical, eco-nomic, and social situation is do elopingin the affected areas.-0

Similar pi essutes on land arc es identin tiopical Latin America. According toU.N. Food and Agri( ulture Organizationtescarchers: **There is abundant evi-dm e in c et'tain regions of Venezuelathat. with grossing population pressure.the fallow period is becoming increas-nigh shorter so that soil fertility is notionized before recropping. This leadsto a fill in the organic content and thewater holding capacity of the soil. Soilstructure deteriorates and compactionbecomes more common . . . in otherwords. with the population of modernmnes, formed% stable. shifting cultiva-tion sssi ems are now in a state of break-down."11

Another source of accelerated soilerosion in recent seats hos been the shiftto 'auger farm equipment, particularly inthe Sovtet Union and United States. Inthe United States. for example. the shiftto large-scale equipment has often led to

CotRerring Soils

the abandonment of field tetiai es t on-structed uI I educe tuntill on slopinglands. In (Inland farming regions. treeliiItet belts that interfere with Meuse oflaige.st ale equipment h.n also beenwillow& I he enlargement ol fields toat inimodate huge um tots and giant(mutinies also I Cd11( CS !Mittel .teals thatfuse tradmonalls seised as thetks onerosion.

Tins nansforination of agriculturalat tit es has been fueled bs the growing

%cod& ide demand lot C.S. feed t rips.paint-Wads t inn and sat beans. and hsthe asailabilits of cheap chemical fernh-mi. Demand growth. in turn, has beenamplified In population growth that hashastened the deterioration of traditionalagriculture to mans countries. As a re-sult, agt a WM1.11 %%stems throughout thewin Id ate now expet tent mg unsustaina-ble lesels of soil loss.

DIMENSIONS oFPROBLEM

One of the first st ietinsts to assess thedimensions of world soil erosion was g-ologist Sheldon Judson. who estimatedit 1968 that the amount of nserliorneso 1 sidiment carried into the oceans hadnu leased from 9 billion 1011s per sell'btlore the inuothienon of agriculture.gracing. and other activities to 24 billiontons per sear..ittdson obsei s c- -Thineis no question that man's occupant's ofthe land increas s the rate of erosion.While that ocitipanon is intense and isdirected :o the use of land fOr cultoatedcrops. the different . is one or moremagnitudes glea.' than when the landis mle, a complete natinal segetaiise

such as grass or forest His esti-mates indicate that humans base becomean important geologic agent. asi aerat-ing the Bost id tot) to the (weans, et

(571

Although detailed informationion on soilel osum all ihe lot al lesel 1s asailable (or(ink .1 few commies. data on the sedi-ment load of the 'solid's major risersand On the wind-borne mos einem of sodos et the oceans do twinkle a broad -bi slew of soil eiosion at the conti-nental 'mei. The mosi remit figures onmei sediment flow show the world'smajor rivers t al rsing !leas% loads of sodto the oceans. Data compiled in 1980 bythree Chinese st ientists working for theYellow Riser Conservancy ( :onn-lissom'it Beijing nub( ate(' Mat river was earn-ing 1.6 billion tons of soil to the of caneach sear. (See Table 4-2.) Ilsdrologistsestimate that on average one-fourth ofthe soil lost through erosion in a riser's

atershed actually makes it to the oceanas sediment. The other three - fourths isdeposited on footslopes in resers oirs, onriver floodplams or amber low-lyingareas. or in the river5ed itself, whichoften causes channel shifis.13

Close behind the Yellow River, interms of silt load, is the Ganges of India,which deposits 1.5 billion tom of soilinto the Bas ol Bengal each year. TheMississippi. the largest U.S. river, carries

Table 4-2. Sediment Load of SelectedMajor Rivers

AnnualKist 1 Commies Sedmiem Load

Mullion metrictons)

Yelkm Chem 1.600G,mpes India 1.455Anktion sew' al 363Nfroisstpp tutted States 300itt"Add% Burma 299Rose India 172

Mekong se era' 170

4~141t(11 at t 5 A ttia.01% mid Dmigirt. "Kam.tall lusion in the t Mint S .% 51.iir of Ilse t. to%inertia,' Suttees of Age° ccccc 111. %tut t wit/onall aim/ in th, Irupsel iNfatimon. %%I St 1982)

73

Wit State of the 11'0dd-1984

300 minion tam of soil hits the Gulf ofMexico each Year. far less than. the Yel-low or the Ganges. Yet it represents top-soil from the agricultural heartland andis thus a source of major concern for1..S. agronomists. 14

Scientists pace recentlY doe umemedthat Yam amounis of wind-Wine soil arealso being deposited in the oceans assediment. Island-based air sampling sta-tions in the Atlantic. along with recentsatellite photographs. indicate clearlythat huge quantities ol soil dust aiebeing tamed ail of Ninth Africa overthe Atlantic. Clearly visible from satel-lites. these huge plumes of fine soil pan-t les from the .n id and desert expanses ofNoi di Alma at 111114:S create a dense hatemet the eastern Atlantic. Estimates ofthe amout, of .111 to an sod being carriedwest in this %%al.. 14IMPIttlilllfoor studiesbetween 1972 and 1981. range from100-400 million tons annualh. with thelatest report bring at the upper end ofthe range.15

:% 1983 &sewe irticl reported a sum-lai loss of soil from .sia. soil that iscarried eastward over the Pacific. Airsamples taken at 'the Manna Loa Oh-set t aim t in 11awaii from 1974 through1982 indicate .1 continuous moyememof sod parse les from the Asian main-land. kith a peak annual flow consis-tenth occurring in March. April. and14%..1 lime that conu ides with a pc, midol stiong winds. low ramlall. and plow -mg in the sennand regions of NorthAsia. Scientists at Mauna Loa can nowtell when spring plowing starts in North( :hina)"

Although soil erosion data ale nota% ailable for most t OUIltileS, a rough es-timate: of the excessive worldwide: loss oftopsoil from croplands is needed. With-out such an esimiate. assesmuents of theworld food prospet t ale unrealistic. theestimate developed in _the followingpages is the hot that we can constructfrom the information now mailable.

Other governments should follow theI.".S. lead and take careful inventories oftheir soil resources so as to determinethe rate of excessive erosion. Only thenwill they have the information needed toformulate intelligent agricultural andpopulation policies.

The Soviet Union may be losingmore topsoil than any other coun-try.

In addition to broad-brush estimatesof oy exalt soil loss at the continentallend. the other sources of mole detailedinformation on soil erosion from crop-lands include goy ernmental surveys.data on sedimentation of reservoirs andflyer sediment loads, reports from re-sear( h plots, and the observations ofagriculturalists.

I he United States is one of the coun-tries that has analyzed its soil losses indetail. In response to the Resource Con-seil anon Act of 1977, the Soil Conserva-tion Sere ice undertook an exhaustive in-semen) of land use and soil loss. Rasedon some 200.000 data samplings. ityielded remarkably detailed informationon local soil loss throughout the UnitedStates.

Abet the National Resources Inven-tory gathered data on soil erosion. sub-sequent analy ses related the rate of soilloss to the tolerable level. a rate thatwould not impair long-term productiv-ity. Calculated at front one to five tonsper acre annually. depending on soil andclimatic conditions. this figure repre-sents the maximum level of soil erosionthat will permit a high !eye! of crop pro -ductivity to be sustained economicallyand indefinitely. The inventory showedthat oser one-third of U.S. cropland waslosing more than five tons of topsoil peracre. In total. the loss of soil at this ex-

74

Conserving SmA

cessite rate fiats the t ..S t iiiplaial baseof 413 million acres totaled 1.53 billiontons, with the bulk of it (tinting from lessthan one-tenth of the clopland.17

India is one of the few other t ()mullesto «ffliptle a national estimate of soilerosion loss. In 1975. bahan agi *culturalscientists collet ted data On 'owl soil eroesum froin each of the i eseart h stations inthe national network maintained In theIndian Council for Agricultural Re-search, Using these figui es, dies es-timated that 6 billum inns of soil areeroded from India's t toplands (Nullsear IS From this and (ruin an estimatethat 60 pert ent of the (upland is erod-ing ext (vase's, the ex( mise topsoil loss( an be t alculated by subtracting fromthe total a tolerant e les el of Inc tons peran e. lus s ields an ex«.ssis e topsoil lossIrom Indian *:upland of 4.7 billum tonspet sear, inure than twit e the i'.S. 'est.'.I Inc estimate rests on (.n less data than

does the figure fin the United States butit is based on infOrmation from agra al-twat m alit nos fimuliar with local soilsand it is mi 1 ()borate(' In dm- silta-tion of lisdroelectue re risersediment loads, and otht i 1...arcct in-di( atom.

I he Sos tet Union. whit II has theworld's largest t upland to ea. nip belosing more 101)5011 than ass other coun-trs. Although detailed information onthe extent of the loss is not as adable.malicious sow( es --nit haling Sostet re-search reports. public statements Inscientists and gos ernincut officials. andthe obsei s aeons of s isitors from abroad--nn ate the %merits of the problem.Papet s published bs the Sod ElosionLabor:mill at the Universits of Most ins.for e;tiiiiple. indicate a ss etc and st ors-etimg erosion %domain

During the eat Is eighties the olla ialSoviet press carried statements bs sodscientists pleading with the agrit ulturalbureaucrats to address the loss of top-soil. And in earls 1981, Dr, Vladimir Bo-

(59)

rossks . 41 p1011111Wilt, soil scientist and di-R.( tot of the Ka/akli Institute of SodSciem e. pubhcb chat ged the Ac.tdeiinof Agricultural Sciences with neglect ofsoil problems. In a broadcast on Moscowradio, Borovsk, argued that Soviet agri-c ulnae will he retarded without effectiveAl management. His warnings have re-c en ed some support at the highest levelsof Soviet government, with Politburomember Mikhail S. Gorbachev urgingplanners to heed the advice of soil seien-tos,19 But in the face of pi essures toexpand linble' ton and reduce the foodimport deficitnow the world's largestsod st ienusts are often ignored andresponsible soil management practicesare cast aside.

As in the United States, erosion hasbeen spurred by the shift to large, heavyequipment and the enlargement offields. which eliminated many naturalboundail constraints on erosion of soilIn both ss ind and water. Each year anestiamed half-million hectares of crop-land are abandoned because the% are sosevereb eroded in wind that dies are nolonger worth Wining. One scholar ofSos let ens wonmenial policies andtrends, Thane Gusiarson. observes.-Flits' scars of neglect have left a legacyof badis damaged soils."20

Ahhoagh there are no official figureson soil erosion, an estimate of Soviet soillosses based on the local data that areasadable can be «impaied with the situ-ation in the United States. where de-tailed erosion information has been col-lected. Two Sos let scientists, P.Polems es and S. Vashnkosa, writing onenvironmental protection and agricul-ture m a Soviet economics journal in1978. reported that "two-thirds Of theplowed land in the Soviet Union hasbeen subjected to the influence of vari-ous forms of erosion." Knowing the areaAlec ted in erosion. only the rate of ero-sion need be determined to estimate thethud topsoil loss 11

76

i60) State of the WorldI984

Like the United States, the SovietUnion has an extensive dryland farmingarea and a substantial irrigated area. TheEuropean Soviet Union, which accountsfor a large share of total farm output. hasmoisture levels similar to the U.S. Mid-west. In tertns of rainfall intensit%, to-pognipin, and erodibilit) of pre% aihngsoil pes, nothing indicates that soilerosion in the Soviet Union would bemarkedly less than in the United States.Where (topping patterns are concerned.the So% let Union relies much more hea% -ily on small grains, whereas the UnitedStates relies relatively more on row(lops. stub as corn and soybeans.

The world is now losing an es-timated 23 billion tons of soil fromcroplands in excess of new soil for-mation.

Much of the So% iet grain land. how-e% cr. t cumins bare during the winter andearl spring, when rainfall is heaviest inteam regions of the country. In a paperpresented m the United States in 1983,P.S. Tregubov of the Dokuchaev Soil In-stitute in Moscow reported that land leftin hare fallow to be sown to winter cropssustained losses that far exceeded thetate of new soil formation. lle obseredthat "spring was found to be the mostdangerous period because soils are(hat acterited b% fluidit% after snowthawing." to dociunent this. Tregitbovowl long-term experiments showing amean annual soil loss on bare fallow of59 tons per bet tare annuall% in the BalticSea shore regions. 46 tons per hectare inthe Rosto% region. and 32 tons per hec-tare in the Trans( iiin Asian region. B%comparison. in the American states withthe most severe erosion rates in 1977.Tennessee lost nearl% 41 tons per hec-

7G

tare, Missouri lost 30 tons, and Iowa,just over 25 tons.22

These data and observations suggestit is not unreasonable to assume that So-% iet soils are eroding at least as rapidly asthose in the United States. If onci-third ofthe land is affected by erosion at the samerate as in the United States, which maybe a conservative assumption, the exces-sive loss of topsoil from Soviet croplandsis nearly 2.3 billion tons per year.

In China, the fourth major food-pro-ducing country. river siltation is now anationally recognized threatone thathas reached dimensions unmatchedelsewhere:Dust storms in the north andthe siltation of major rivers indicate theheavy soil loss. Observations by outsid-ers who ha.ve been called in to help as-sess soil conditions indicate that the ero-sion rate in China is at least as great asthat in India, where more detailed dataare available.

A comparison of the load ofthe Yellow River in China with theGanges in India indicates the relativemagnitude of soil loss through erosionfaced by these two population giants.The Ganges. with a drainage basin of 1.1million square kilometers, carries an an-nual sediment load of 1.46 billion tons ofsoil, while the Yellow River, which has adrainage basin of 068.000 square kilo-meters. (attics 1.6 billion tons of soil tothe ocean each year. These numberssuggest that the rate of soil loss in Chinais substantially greater than in India. Forthe purposes of constructing a roughglobal estimate, however, it can be as-sumed that the erosion rate on China'sct (Timid is the same as in India. GivenChina's smaller cropland area, thismeans that China's excessive loss of top-soil from its croplands totals 3.3 billiontons per year.

For most Third World countries infor-mation on soil erosion is largely indirect,such as data on sedimentation of reser-% oirs and river silt loads. Other indirect

Laiisnite Soils 1611

souk es indude odor motion on t i oplandabandonment as a result of se%ere eio.con and crop reports showmg long-term declines in %aids. Among the mostgraphic soures ale reports bt zip it (a-lma! scientists. de. elopment tet Inn-clans. mid other obsertrs. (See I able.1-3,1

Altogether. the excessite loss of top-soil from cropland in the four majorloud-produing countries, which have52 percent of the world's cropland and

a« ouni fot over half of as food produc-tion, is emanated at 11.8 billion tons piear. To obtain a rough idea of excessit e

soil erosion for the world as a whole. auassumption must be made about othertountries. If the rates of soil erosion forthe test of the world are similar 10 thoseof the "big fintr"which is a consort a-nte assumption giten the pressui es onlattd in the Third Worldthen the worldis now losing an estimated 23 billiontons of soil from croplands tit excess of

Table 4-3. Observations of Soil Erasion in the Third World

Comm.. Ohsemation Source

Nepal "laical inhabitants .. all concur(Katmandu) that the problem is more severe

now than a generation ago.Pei ti "Eicisitin'et ectimated to affect

between rit) and 60 percent ofthe surface ell the wholec ountri."

Indonesia "Sod erosion is tic:ming an(Joao) - et 44ogwai emergent. at Ja.a. a

result of overpopulation_ whichli.ic led to deforestation andmisuse of hillstde areas loland-htingis fainters Erosion isIming sast to land at anAlarming rate. much faster thanpiesent reclamatimt programscan restore it." .

Ethiopia "1 here is aik ens ormunentalnighomaie unloldmg below outc.c.s Met I 1)1111011 too oftopsoil flow hum thiopia'shighlands each %ar

South Alto a l'he pito nice of Natal.nu oipmatnig Komulti. is losing201) indium tons of topsoilautumns."

nolnia "Recent aerial photogiaphs baseshriven the timid extension ofdeseil-hke c (1(1113011.. !Meted 1)%

wind iosion."Iran ""l he area 01 abandoned t tiltisaled

land has doubled in recentseats"

Matentata &seam!: and fkelopment(Boulder. Col ). 1982

.1fountatn Research and Development

(Boulder. Coll. 1982

VS Einhics...jakarta. 1976to

1.' S. AID Mission. Addis Ababa.1978

John lianks. Institute of NatmalResouices. Natal. 1980

ilelene Rniete (1'.%tc. Institut cis'lames Etudes c.%ineriqiie14130e. Paris. 1980

1 bit old Di gne. 1 vs" led)I'uneistt. 1971

7 7

$ 62) Sink ig Me Woid-1981

new soil foi indium. (See I able 4 -'i.)neeatISC of the shortsighted way one-

third to one-half of the world's crop-lands are being managed. the soils onthese lands hat e been con% el led from amewabie to a nonrenewable resource.

Assuming an average depth of remain-ing topsoil of seven inches. or 1,120 tonsper acre, and a total of 3,1 billion act esof cropland, there are 3:5 trillion tons oftopsoil with which to produce food,feed, and fiber. At the current rate ofexcessive eiosion. the. resource Is beingdepleted at 0.7 percent per year-7 per-cent each decade. In effect, the world ismining nincli of its cropland, treating itas .1 depletable iesource. not unlike oil.

Whet' most of the topsoil is lost onland where the underlying formation((insists ol lock or where the productiv-

of the subsoil ism° kw to make coin-%anon mono:mud, it is abandoned.More commonls. however. land i.vtitni-ties to be plowed es en though Iasi ofthe topsoil has been lost and eventhough the plow laver contains a mixtureof topsoil and subsoil, with the latterdominating. Other things being equal.the real cost 01 food production on suchlaud is far higher than on land whet e thetopsoil layer reinams intact.

Table 4-4. Estimated Excessive Erosionof Topsoil From World Cropland

otal 1.xt essiseComins ('rnpLind Soil Lim

:Kies) ton+)

4.13 1,500020 '2.300346 4.700245 3,300

rotal 1,024 11,800

Reel of World

Total

1,499 10,900

3,123 22.700501 R(1 Woitholt it iliSliltile

TIM EROSION OFPRODUCTIVITY

Whens Nr erosion begins toexceed newsod formation, the 'layer of topsoilbecomes thinner. eventually disappear-ing entirely. As the topsoil layer is lost,subsoil becomes part of the tillage layer,reducing the soil's organic matter. tilth.and aeration, and adversely affectingother structural characteristics that make

ideal for plant growth. This overalldetetiorationin,soit structure is usuallyaccompamed by a reduced nutrient re-tention capacity, which lowers produc-tivity further. Additional chemical fertili-zer can often compensate for the loss ofnutrients. but the deterioration of soilstructure is difficult to remedy.

The effects of erosion on productivityare not easily measured since they arcusually gradual and cumulative. In aneffort to understand the erosion/productivity relationship better, in 1980the U.S. Secretary of Agriculture ap-pointed a National Soil Erosion-SoilProductivity Research Planning Com-mittee. Among other things, committeemembers began gathering data frompast experiments to establish an empiri-cal foundation for predicting the effectof continuing soil loss on crop yields andproduction costs. They reported thatwhen corn was grown continuously on aplot in Iowa from which the topsoil hadbeen removed, yields were only 20 per-ent of those on a control plot. In an

experiment in Missouri, corn yields on adesurfaced plot were 47 percent of thoseon the control plot. In this case, the sub-soil was a clay loama higher-qualitysubsoil than is commonly the case.23

In an experitnent in Fast Texas. cot-ton yields on land with the topsoilremoved averaged only 32 percent ofthe control plot's. And in Minnesota.yields on severely eroded soils wereroughly two-thirds those on slightly

7a

Conersng Sorts (!67 )

et oded sods." A 1979 expeinnent onpiedmont soils in Geo! gm designed tomeamire the effects of erosion on corn%wick showed that se% ereh eroded.moderatel% eicled. and 'winded soils.fleraged 36. 75. and 92 bushels iepec -in eh. On these sods. reseal (Let s es-timated that eat h c entimeter of topsoillost through water ettrtion 10114 ed thea% erage torn sield b% 2.34 bushels pera( te.2

Leon IAN, an agi is Whit al engineerw uh the U.S. Dept uncut of Agri( tam e:has pros tided probabh the most comps -hensn e collection of research tesults onthe ffc t 01 soil erosion on land produc-it% us . (hawing on the work of U.S. soilsc lentists both within and outside gm -eminent, lAles compared 14 indepen-dent sninies.-1110II undertaken in the

Korn belt states. to 'OMURA to. the effectsof a loss of one inch of topsoil on corniields. llis curses found that midi a lossreclined ields from a low of 3 bushelsper mite to a high of 6.1 bushels pet a( re.iSee 1 able 4-5 ) In percentage touts,the loss of an inch of topsoil reduced( inn %lads at these 14 cites bs an aser-age of 6 percent. Results for wheat,(hawing on 12 studies. showed a similarrelattonlup between soil erosion andland plochictiits. I he loss of an inch of

topoll leduil wheat skids 0.5-2.5bushels per acre. In pert euttage terms,the kiss of an inch i Mum! wheat ieldsan as erag of6 percent, exac tls the camea for corn. (See Table 1-6.1

All the studies on soil erosion andLoud piodoctun that Lyles citedshowed that the excssiw loss of topsoillowered ields measu rabh. although theextent of sield reduction %ailed. And. asnoted. his compilation ofstudies showeda remarkable surtilarit in the effect ofsoil etosum on the steld of wheat. a cropusual]) grown unda lower rainfall con-ditions. and that of win. usually grownin areas of higher rainfall. Recent. moredetailed research on three soil types inMinnesota shows that the effect of ero-sion varies with soil type and depth. Itspecificall notes that on some deepersoils. such as the Kenyon soils that are 76inches deep. the near-term effects oferosion ate negligible.26 For the worldas a whole soils of this depth constitutea small share oldie total, an exception tothe mote is pis 6-8 inches of topsoilfound on most cropland.

Perhaps the most detailed analYsis todate of the long-term effects of soil ero-sion on land productivity and food pro-duction costs is on undertaken for theSouthern Iowa Conservancy District.

Table 4-5. Effect of Topsoil Loss on Corn Yields

1.11( atomYield Redo( Hon PeiNO ol 10pmn1 Lim Soil De q i pi ion

(hushelfac re) (pet vein )

La 1 Ceti it al. Illmoi :3 7 1i5 Su %get t silt fishIcotl let. 111111.11ht .0 3 rowlet. Itiookton, and Part

Clarinda. Iowa 1.0 51Silt loam,

NI to hall AI Waint 4 eenfiekl. Iona 3.1 1;3 Shekbs Ai loamShenandoah. Iona 11 I 5I Mau shall .ill loamBedlam. Mi... Jo 10 110 Shllo and (1ninth silt loam %Cohinibli. Ohio 3 0 Il.0 Celnia silt loam%Viimier, Ohio 18 83 ( :anlield cull loamsot Kt t % a11011% Ulm) I% i ch.(' in I cols LAO. APO%lilit. Hirt l of U Old F1011(111 oil Soli iP)tfclik Ii 11%."ioutitai of Nod ow/ ii (11,4 t Wet,: Itit(04 NoMriiiIP4.1 /1),( ember 1971

7a9

,

(64 ) -. State of the orld-1984

Tah le 4-6. Effect of Topsoil Loss on Wheat Yields

LocationYield Keductoon Per[nth of Topsoil Lost Soil Description

thushels/acre) (percent) fAkron. Colorado 0 5 2.0 Weld silt loamGeary Como. Kam Js 1.3 6 2 (not at adable)Manhatm, Kansas 11 4.3 Smolati silty clay loamColumbus. Ohio 13 5.3 Cropped soilOregon i.0 2.2 Deep soilOregon 2.5 5.8 Thin soilPalouse Area. Washington I 0 6.9 (not available)

Mn O in I s % AIM'S reports lite(' in I eon Liles. - Postible Elk( is 01 wind Erroon on Soil Pi-odium. lit."Mono! of .Soil awl Wain Comerraitont, Noserober/Detembet 1975,

tConducted by an interdisciplinary teamof three sc lent ists, this analysis assumedthat sod erosion would continue at re-( ent rates. The researchers classified thedeg; CC (PI erosion into thiee phases: soilsthat arc slightly eroded, with no appre-ciable mixing of subsoil and topsoil inthe ploc layer; those that are moderatelyeroded. with some mixing of subsoil intothe plow layer: and severely erodedsoils, where the topsoil is largely goneand the Mow layer is pi edominantly sub-soil.

In 1974. the base year. 2.1 million ofthe district's 3.5 million acres of crop-land fell mm one of the three erosion

t, phases, with the largest acreage being inthe moderately eroded category. Assum-ing a continuation of the same rate oferosion, this would also be true for theyear 2000. But by 2020. the researcherspredicted, the largest share would bein the severely eroded category. Assoils prowess from the moderately toseverely eroded category. the amountof nitrogen. phosphorus, and potashneeded to grow corn increases by 38pounds per acre. (See Table 4-7.)Closely paralleling this would be an in-crease in fuel requirements for tillage.As erosion proceeds. soils becomc.morecompact and difficult to till. The actualfuel increase ..cried widely by soil type,

but on the average the severely erodedsoils required 38 percent more fuel fortillage than the slightly eroded soils.

Soil erosion would not only raise thecosts of production by increasing theamount of fertilizer and fuel used, itwould also reduce yields. For corn, ashift from slight to inoderate erosionwould reduce the average corn yield by16 bushels per acre, while going fromthe moderate to severe category wouldlower yields another 7 bushels per acre.(See Table 4 -8.) Although the soybeanyield decline was much smaller. it wasproportionate, since soybean yields areroughly one-third those of corn.

Although there are little reliable data,)ti the effect of soil erosion on land pro-

Table 4-7. Increase in Fertilizer Needsfor Corn as Soil Erodes, Southern Iowa

Change inErosionPhase Nitrogen Phosphate Potash

Slight toModerate

Moderateto Severe

10

(pounds per acre)

!) 6

30 1 7

writer: Faill Kosenberrs. Russell Knutson. andEat y Flamm "Fredming the Effects of Sod De.pinion From Erosion." Puma of Sot' and WaterCower-mason. miiviiior 1980,

Su

Geom./vim; Sods

Table 4-8. Reduction in Yields of KeyCrops as Soil Erodes, Southern Iowa

Ch MtgeErosionPhase

Reduction in Yield Per Aciitool Sosheans Oats

Might toModerate

Moderateto Swore

(bushels)

16

7 3 4

wvio.t P.otil Rowoobettl. Rime II Knots and1,40 "Ptedo mg the Eilett% of Sod thpletton Rom Erosion,- prima/ of Soil and r WetControrafton. %a% /June 19140

dot traits 101 most «attunes. some in-sights um) the relationship can bedoused hom these U.S. studies. Giventhe «insolent s 4 If the dec line in produc.twits across a wide iang of soil typesand (reps, it would not be unreasonableto assume that .1 similar relationship he-tu cell sod erosion and land productivityexists m other countries, for the basicagronomic relationships arc' the same.indec d. research on West African soilsshows land productisuy there to he evenmore sensitive to topsoil loss than inNorth Amerira. "tlw loss of 3.9 inches oftopsoil in West Africa cut corn yields by52 percent. Yields of cow peas, a legumi-nous crop. were reduced by 38 percent.This marked decline may attest to thelragilits of tropical soils.27

EROSION'S 1NI)IRECT COSTS

When farmers lose topsoil they pay for itin reduced coil fertility, hut .unlortu-muck the t oos of erosion are notottlined to the tam alone. As soil is car-

ried front the farm by itinoli it may endup in local streams; rivers. canals, or in-i-gation and hydroelectric reservoirs. Theloss of topsoil that reduces land

(6gl

inns m.s also reduce itngattott. electn-t al genet:num. and the nasigabdity of

ater way s.The increase in the amount of me

pled land in the world went hand inhand with efforts to raise food suppliesduring the third quarter of this century.Often the centei piece of national devel-opment strategies thioughout the Thud.World, multipurpose darns representedenormous investments and an importantpart of the capital stock of new nations.'typical of these was the Mangla Reser-voir in Pakistan. The designers of thereservoir projected a hie expectancy forthe dam of-at least a century. What theydid not reckon on was the effect ofmounting population pressure on thewatershed feeding thZ4-.reservoir. A com-hination of the axe and the plow. Ns land-hungry peasants push up the hillsides. isleading to a late of siltation that willprobably fill the reservoir with silt atleast 28 years earlier than projected.(See Table 4-9.) One recent estimatepredicts it will be filled within half a cen-tury."

In the Philippines. scores of hydro-electric and irrigation reservoirs havebeen constructed many of them with as-sistance from international developmentagencies. Here, as in Pakistan. the com-bination of watershed deforestation andsteep slopes being cleared for cultivationis Yielding record siltat ion rates. A re-port of the Agency for International De-velopment on the prospects for the Am-,buklao Dam notes that "the cutting oftimher and the subsequent loss of waterretention capacity of land surroundingthe reservoir has resulted in massive silt-ing of the reservoir. reducing its usefullife from 60 to 32 years."29

One reason, for the excessively rapidsiltation rates is that multipurpose damsare designed by engineers who some-times fail to recognize the impound-ments they build as part of a watershed,which often drains an area of several

4

1461

Comm

State of the World 981

Table 4-9. Siltation Rates in Selected Reservoirs

Annualt Siltation

Reset-ow hale

. TimeTo Fill

With Silt

EgyptPakistanPhilippinesTait/almaTanzania

A.wan high DamMang la

AmboklaoMatumbuloKisongo

(metric tons)139.000,000

3,700.0005.800

19,8003.400

(years)

100

75323015

use itt t S tt El-Swatf and EV Dangled. -Rainfall El OSUMI in tilt.! Trup1(3. A State of the An." toAnntitan Sot len of Agrottettot. brit f.Penrob and Comm-yahoo An Mr 7ropso.1 (Madison. Wm.. 1982)-

thousand square miles. The AnchicayaDam in Colombia is a classic exam*.Engineet . expresed little concerti withthe siltation problem, e%en though when

8 the pioje< t began farmers were alreadyiading the uppet readies of the water-shed that Iced) the dam. Within two(*Als of ihr.tompletion. the dam had A-

rea& lost a quartet of its storage capacity because of sillation.30

In India. the indirect costs of water-eroded soil ..re summed up "sell by B. B.Volira, Chairman of the National Com-mittee On Etronmental Planning. Heobsert es that the -pi maim e siltation 01gin 500,000 odd ponds and of the 487

reservoirs of our major and medium irri-gation and multipurpose projects onwhich the community has invested over100 billion rupees during the last threedecades is a particularly serious matter."He notes that siltation rates are nowcommonly several times as high as therate that was assumed when the projectswere designed. (See Table 4 -10,) yohraobserves that not only is the life expect-ancy of these projects being severely re-duced, but "in most cases there will beno altertiativt sites for dams once theexisting ones are rendered useless." Adam site is often unique. Once lost, itcannot be replaced. For India. what is at

Table 4-10. India: Siltation Rates in Selected Reservoirs

Reset sou Assumed Rate ()1ined Rate

Ratio ofObserved to

Assumed Erosion

(in acre-feet)Bliakai 23.000 33.475 1.46NIanlion 684 5.980 8.74Matorakshi 538 2,000 3.72Nuant Sugar 530 8,725 16.46Pam het 1.982 9,583 4.81Raitiganvot 1.089 4.366 4.01rintgalihadra 9,796 41,058 4.19(lap 7.448 21.758 2.92

sot ma Adapted from S A Eh-Swat and 1. W Dangler.. 'Rainfall Erosion in the Tropics. A Stateof the Art." in Amen( an Sotto% of Agromum. Jai b000n and Conorynnon at Mr Traps (Madison.Vow )982). .ind t.etiile for Silent e and 1.ton-outflow. 1 Iv Stair of Atha , AIIIIIMATIVIII 1982 (New

Della 1982).

Conserving Soils (67)

stake, according to Vohs al. "is die loss ofIte irreplaceable potentialfor imga-(IOW for electricity and for flood controlthat these storages represent."sl

Ile hat if countries with soil-siltingdisasters goes on and on. The 'frameschange but the conditions are commonWhether m Nigeria. Indonesia, Pakistan,or Mexico. the same basic principles ofsoil physics are at work. When soil onsloping land is fat need improperly, k be-g;is to move under the impact if rainand ends tip m pia( es whei e it usuallydoes more harm Alan good.

Soil once used in the Midwest togrow corn now clogs the Missis-sippi waterways.

'the third major indirect cost of soilerosion is the loss of navigability. Per-haps the most dramatic case* occurs indie Panama Canal. "Ilie combination ofdeforestation and the phwing of steeply-doping rand in the '.at -shed area bylandless campesinos is leading to an un-precednted siJtation of the lakes thatmake up part of the Canal. If the trendsof the late seventies and early eightiescontinue, the capack of the Panama

seal to handle shipping will he greatlyrechic oil by die end of tlw century. forc-ing; many ocean-going freighters thathave relied on its 10,000 mile shortcut tomake the trip.via Cal e Horn.32

Within die United States, soil onceused in dw Midwest to grow corn nowclogs the Mississirpi waterways. One ofthe largest items in the budget of theArmy tarps of Engineers is the dredg-ing of inland waterways. particularly inthe lower Mississippi River. Vast quanti-ties of soil reach the Golf of Mexico tobecome ocean sediment, but substantialamounts are deposited on the way, mak-ing larg -scale dredging imperative if

this major artery connecting U.S. farmswith world markets is to continue tofunction.

THE ECONOMICS OFCONSERVING SOIL

Recent U.S. studies have rather consis-tently concluded that soil erosion con-trol is often not economical for farmers.based on strictly dollars-and-cents crite-ria. The study of southern Iowa soils r-ferred to earlier showed that the short-term cost to farmers of reducing soilerosion to a level that would not reduceinherent productivity would be threetimes as great as the benefits.

Narrow profit margins. such as thoseconfronting U,S. farmers during theearly eighties, might well met., that iffarmers were to inxest in appropriateconservation measures their profit mar-gins would disappear entirely, forcingthem to operate at a deficit. They wouldthen face the prospect of bankruptcy inthe near future. 'Alternatively. they couldcontinue to follow existing agriculturalpractices and avoid nearterm bank-ruptcy. but face the prospect of declin-ing productivity over the long term andthe eveninal ahandoinnent of land, if notby this generation then by the next. Inthe absence of a government.;) cost -soar-ing program similar to those used sceffectively in the past, a farmer's only -,"choice is whether to go out of business\sooneror later.

The economics of irosion control inthe United States has recently becomemore attractive With the adoption of newmirinium-tillage "ractices. In traditionaltillage the moldboard plow, the prinCi-pal farm implement, was used to turnover all the soil in seedtied preparation.With minimum tillage the land is .

roy

e

c

(a t Siam tltr World-1981

plond n1 dn. ti admond wa Ci op 1 e.1-dues are left on the .itrlaYe and reed. atechilled due( tl% into the unplowed land.%nit herb'( ides pro% tchlig the need enn-ui of that niec bald( al 4 IIII:1411ill in ei-ott.1% did I he lk.111011)1111% (II he' bitide.enabled minium' tillage in the ante%41V.11)411 the Intl 0(1111 11011 111 ( heal)

al fertiluei ',emitted lamer. to M.-pen.e null clop rotation containinglegume.. :Owe commotth, howvel. illimminum 1111.-ige nation .trip of landtie tolled %%hew the coin. .o% bean.. ofothi. c lop. ale planted. ie:o mg the.pac between the row. undisturbed.

to «veer%e Wel co.t."011.ciott. U.S!at incl. net e ahead% experimenting

..Mott. I 'Milled 1111.tg 1/1 at HIT%I Ile C.1111 e1('Ill1973 1(1)101w) dn. change. the imita-tion. twine rills. de.eloptin in III' init. ellc: t sort et o.ion. laud notbent} plowed and c lop t.tilite Tell Onthe .tillal e. 'oil 1. plow( ted Item nn.and tuuofl 1. nine h le... 1 he re.ult is thatImmo. adopting minimumtill or no-1111pia' e. to 4 onme fuel ha% erued that ilie%..ire also comerving theirsod ludn idnal farm(r doing their oats«).t.lh..nefit (all Illation. muld neigh the-11))011.111( e ol both ettergl and soil say-ing. in &tiding whether to adopt thenest pia( II(

Not all and not all .ituations lendthntke. to minimum tillage ".tillin' lea."... .oil moraine and .1. .vs .oilto tripe r` ( the .pring.. In areasittC11 a the not them corn belt. the shortgion te.itict the tdap-ttott of minimum tollage, Still. the gron ohin ludo( etl 41( I cage in the United

bc ietnatkabl %teach. III-

ang (t% %eat .nice data one( winhypo. Ill 1972. In that %eat..ilearb 30trillion an le.t ought% one-tenth of theA tail% 4ited al (*A% 41% m tedinediSe I able 4-1 I.1 In 1983. it I cached 126

acie.. one -thud of all the land incrop.,

Table 4-11. Unted States: ConservationTillage, 1972-83

At eh inComenation

1e.te li !age

(million at cc.)11172 29 71973 43 91974 6:41975 5/i

1976197719781979

59 o70 I)74 8852

1980 88 51981 9.01982 111 914183 125.8

Share 01IlamestedCloplandt

(percent)

10.013.71-1

16.7

17.64).0.2

`22.2

24 6

25.127.531.223.1 52

14,1h.lie o1 kineoeci itopl,m41. (III tamed h,uorialuatili. Hillside% aged li.ilesled and that tm

h Imp 1.0(4 lnuuiau c, (ht Cun.rnetuiti1 illagt (Ad, put, the 1983 !wow A '21 pc.i en'sari sit I. Ad- tuft to 4n. %Loch l982 end Mardi1983, WorIaluat; Ii Intutuie

Dpne the encomaging" increase inthe use of minimum tillage. there is littleinformation to done on its impact onScverel eroding land. While noting theenecnraging spread of reduced tillarefarming practices. Robert Gray of theAmerican lest inland l'rust observes that(Am mmimum-till and no-till practicesshould be forsworn on the most severelytickling land, which should not he inpi (Auction at all." Preliminary observa-tions indicate that minimum tillage isbeing adopted by the more progressive.innovative farmers and that all too oftenthese ate not the ones on marginallands, which are eroding most severely.Nonetheless. the m et<til eflect of mini-mum tillage on soil conservation musthe .ietsed ac positive and hopeful.

Although roughly one -third of U.S.cropland as of 1983.

84

F

1111..Mk

t Ittestr.. x, Scilik i 69 i

the PIM ili V 1 1101 %Ith'1%. iiNed III 01111[pal l of (11( %%Of Id. duitigh &de ale 04casion.11 [derelict to it Fot example.die 14,0 So% lel scientists cited earhei.who iepot ted on en% nointiental pond -UM' and awn 'dune. noted that -4method in which the soil Loci is nottinned, in die ticattnelit of the sod 11.1.been de% eloped {URI lit 'Welt % Biel% Clii 0 Odin eel in Kochi( non in Kataldistan.the Alto. in the t cal. in the LoweiVolga and °diet iegum I he% also ill-di( 44441 that the pc4 tallied I.0 in equip-ment nee(' I loi minimum tillage isbeing manufactured no die ScoldI 111(111 15

Some °loci % et. i 61111 111,11 et01011<0111101 l 11,1111(111m l% uneconomical inthe t 'lilted States because of the untram-meled intorno of pi oda. But .m11 Indic a-lion are that produc boil quotas, Is usedin the Stole( Union foi example. ale .11least as deittictne of sods arilte profitmotive:ilde' 110 Scoiet i.ieni. farmmanageis ale fudged not lo how elfec-Coeh the% contiol soil erosion but l;how iic4 efull% the% fill quofa IntVesteidn commies. lainlownerchip. pai-lictilar.. within a tannk. bongs %%tilt ii a.c email Neil's( of stew al dchip--altlionghThis 0111,1011NI k All be coo widen to et 0-nomic forces. Such a &i d% sense ofstelsaidship c es not exist mo the So% ielt 'mon.

Farmers adopting minimum-till orno-till practices to conserve fuelhave discovered that they are also

- conserving their soil:

Otheis suggest that tli el 01101111(N 4)1

et <>mon c onti ol w ill' bet ome c leat wheniropland %alio.. decline as soil eiosionreduce long-term land 1>roductom.nlortiniatek. the 1> 01 It>1>N011 (10d

not .1114.1 the p;%%sical appc al .nu e 01 theland ill lilt shim 4 'nu, not does it sluocup a: an nuntediatel% ineasin able 14w. 111viodin ton% Go.en the °di la< tor. &n-itwit< mg land %dues. such as inflationand the spctilainc natute Of msest-mem. the Old is Of sod toN10ii 011 1111(1.alma. ale simph now% hiltle in die hol 1Cult

Intel et lates also and i the e( 0110111-kt 01 el 01011 40111101 I Ile highei inter-est 141(5 di e. the les...Holm toe be( mileunestmems ni ilw soil consd%ationlet [inutile.. sm 11 as id [.0 that pa%All cod the long id in Indeed. inkiesthues haw been so high in the UnitedSlates ill (lie e411 1% elgThie 111,11 farmeishaw stmpl% been 1111.11>le 10 c0i1sidel.el 1011N1% 1110N1 1111 (4111etliN 111.11 fill.(' afono m 'pa% bat I..

THE GOVERNMENTAL Rol.)

Althongh 111e t lunge, ui aginultmalpractices needed 10 ( 11P(rext essne soilei osion,i an usuall% be implemented old%IA farmer. &cuh es. thei ( ai e so. eralreasona wl bringing mount undocontiol iequires g Oetililleill 111%01%e-

111e111. I 0 begin with. main tarins can-not e.d% &tontine %%hobo their eo-sion t exceoe. Measuring the gradualloss of soil 1 opus es scientific technique.al. I egaipment: &Amitting whltei itI' est esq% e retina es ilif cm 111.111011 011 tol(Tanta io els lot die pal iwidar ooplaPdin question.

Another i eaon loi woo Innen( in-% oh ement is that mdoidual latmos111111be unable to ;Ilford the consolationpractices that are needed. It ma% makesense loi :.0( 1411. 10 111% es( in soil (onset -%midi den it I is not ptoltabl im the

. man idual far filet. Onh go% et ninon cant alculate the long to in aggi cgale c ost ofNoll emosioo jou the nation . a whole.

t7or State o/ Me World-1981

nu 'tiding off-lai iii a osts sue It .is the silt.dim ed capaut of irrigation iesciunts.

hsdroelectric reNer% ours. or water tuns-Pert ,'steins.

1 he first step fin gmei :intents inWhew. soil dosion is helloed

to be a set ions threat is to assess tate-fulls the extent of soil loss Onls whensuch an ms min s has been done can allthe needed national cost-beneht calcula-tions be made and the appropriate con-servation programs desigueo. In India.km example. winch has a ciopland basecomparable m to the United Statesand which has broad estunaks of.1)11 loss, it is estimated that a compreIleums e witonwidt. soil insentors wouldcost smile S.30 million ---a small price in-deed (migrated with the contribution itcould make to more intelligent pofucy-making.

Most governments also need better ni-Imn'ut.utuon oil the relationship betwerasoil erosion and laud productisit thanth, now lime. The National Soil ErosionSoil Product's its Reseank Plan -ning Committee in the United Statesnotes that "such experiments arc cosilyand tune consuming. Yeats of data ateneeded to es aluate the did is of the gen-eral!s slow piocess.'w

In some countries, the expendi-tures required simply to stabilizesoils dwarf the total appropriationsfor agriculture.

"1 he National Research Committee ofthe U.S. Sod COIISC1141011 Sersice callsmilk on the erosion/pi odoctisit rela-tionship its top priontv. A theoreticalmodyl called the Erosion-liroductisitImpac t Calculatoi, deseloped b% the De-partment of Agriculture. is designed toesalnate both the plissical process and

86

the et ()mum( consequences of erosion.A 1'iodtii tzs its index that calcUlates theratio bCtween actual and potential cropyields at various levels of soil loss hasbeen applied to soils in the major crop;producing regions of the United Statesanti is being tested on soils in Nigeria.Mexico. and India. But the usefulness ofsuch models will depend on the pains-taking collection of years of da'a onmany soil types. an effort that has justbegun.31

Mobdiiing public support for ade-quately funded sod conservation pro-grams will requut -xtensive public edu-cation on the dimensions of the problemand its many consequences. Scientificproof' of the necessity of soil conserva-non us not sufficient. Although soil scien-tists can chart a national plan of action indetail, as they have in the United States.then cannot call forth the political sup-port needed to fund and administer sucha plan. At thus point, national politicalleaders must become involved.

Perhaps one of the best examples ofsuch involvement occurred in the United*ate,. during the thirties when FranklinD. Roosevelt president and FlencyWallace was svcretar of agriculture. De-spite the fact that the country was in themidst of per haps the worst economic cri-sis in its history. Roosevelt and Wallaceconvimed the U.S. Congress to fundwithin the Department of Agriculture anew agencythe Soil Conservatiorsicetha would have the responsibu-ny for administering a comprehensivesoil conservation program. Rooseveltproudly took credit for the planting oftree shelter belts in the Great Plains.38

The ingredient m 'sing from unsuc-cessful responses to the growing menaceof soil erosion is political will groundedin awareness. Over the past gradation.scores of countries haw become food-deficit but few have linked the shortageswith the depletion of their soil by ero-sion. In mans countries people know

Conwilltig Soil% 17i I

that food In t, es air i rang, bin mostdon.; ./101,s (pine 551I%, An under standingthat lost soil Ilte.IIIS towel inherent picidm mils. :shit h III nun means costlierfood. Is needed to tin 'thaw a nationalsod comets anon ethic

Iii mans welkin/ottani% lin I sot woeswhet e moo people ate dine' ate and Use.11 ifI SUbsIsteill e le%O. .1 lack of public:metes( III soil iousenation 11,:s tithe/tools, Farmers in mans 1 bird World il-lages (ail it lister hide con( eill about theflume when tfeir immediate sin sisal isin question. Iii Incha. tepott s B BVohra. "an infOrmed publw opinion can-not , , be wished into existence (netnight A }pea' deal of painstaking andpatient shot k will lease to be done to SV PeOM the bar kb tg 14 IgItOriill«'. Met ila andc omplac en( s "11

In much of the %sorbd Codas, olds duewillingness of national goseitiment toslime the (OSPs of the needed measures

retracing. contour fat ening, NiiIi;i rOpplolg. «h et cropping, rotatingcrops fallowing. and planting shelterbeltswill induce farmers to fight soilco orlon. One Wm Id Batik official oft-set ses that if all the Bank's capital re-sottices of $9 billion pet %CAI' were de-sated to soil consersation, it would(o'er only a small Ira: lion of the landAlec led Its PrOMOtt an lit some countries.the expenditures tecpured siniph to slit-Inhie soils dwarf the tout applopna-;ions hot agt 'culotte.

%Val= the socialist economies. %hoeland is plIblifh OW ow(' and gas .1)-mems ale duet th i sponsible fin thequalits of land management, ilwu e is aneed lot the tiding elites to be edu-cated about basic agi twoms. t'illess na-tional political !cadets locrerstand thata 'MIMI long..eint seciitios dependson lame< inig its implant!, it will bedifficult to gel the necessais commit-ment of leadership time and the budge-ta.s lesources to suppoit an elle: use«itisers anon pi ow am.

..

THE (iiA)'3AL BALANCESIIEFI'

I he long-term so( ial threat posed IA un-columned soil erosion raises profoundcpwtion of Intel geneunottal (minks. IIout genetation petsists in mining thesoils so that w( Ma% eat. main of outchildren and their 4 hildten ma% go him-grs as a tesult. Agin ultmal econminstLlovd K. last het of the l'nnersit of Ne-lnaska obserses that the (plains of outdiet lit the tonsil. sill be "submit:16;11hlime' and the costs dramatically highertitle management of our land and watertcsources Is not impros ed." He notesfurther that "we must cease to behave asif there were no tomorrow. or tomorrowwill be bleak indeed for those who mustspend their lives there."41

Perhaps even more troubling than thecurrent net loss of an estimated 23 bit-hot cons of topoil from the aorld'scropland each ear is the likelihood thatthe process is accelerating as cultivationis mended into eve- more marginalareas. In a world where 79 million peo-ple are being added c.ali sear and wherethe great majority of the earth's inhabi-tants want to imp ade their diets. the de-mand for food continues to climb. push-ing farmers onto more teepls slopinglands.

Soil el osiou is a 'Ansi( al in (tress but ithas numerous ecommin consequen«'sfor prices. product's ny. income, and ex-ternal debt. Labor productivit: isaffected m that as soils are depleted.through erosion it becomes more diffi-cult to raise the ()mini. of that substan-tial slime of the world labor force thatworks on the eroding land. lit largelagrarian societies dm dem 'oration ofthe resoin cc. base makes n mole chili( tiltio 'As(' income pet pei son. hit diet. asgrowth in food output slows. so doesmerall et °noun( outr it. lii lai gels1111.11. lowincome societies with timid

87

172)r - Stair of the World-1984

population growth this can translate nitodm hem% pet capita no Din, as at At eachhas for .1 dozen (Asir es an Africa.

Oser the longer term, world agricul-tut al uade patterns and the mterna-nowt debt stint nue will also be altered.'.s sods ate depleted. (mimics arelotted to tuition food to satish nenemeninal food needs. Stites of Iinnursesin the I bird Weald .Ind LISICTil Europelaid their international indebtednessbeing ,Iggiasated further bs their(11101m dependent e on unpin led food.And Ow loss of topsoil w ill for ce an CIICTg% - for - topsail substitution as it increasesthe need for let tilizet and fuel for tillage.()dim things being equal. the less top-soil thew is. the mote energs is needediti produce our food.

In eflotts to t misers e soil. the world islat mg limit Is 1 he e ate no tiatonal suc-cesses. no models that mum t outlinescan emulate In this lespet t. soil «iser-%anon (outlasts shalph with oil (onset -%mon. whole mores of countries ha«compiled nupresms let olds III recentseats. Almost (-sets% here dependenceon petroleum is deducing as it is usedmole eflu Rni% But thew is no parallelwith sod t onsenation. sn though soilis .1 tat more essential resource.

I he tc Illumines fin arresting soil ero-sion are well established. but halting ex-t essne soul erosion is not a simple mai-tri een for an awn ultmally advancedscowls. U.S. faun plograms user dieseats has demonsitated that land canbe withheld from production for m0-,1011111 reasons. What is needed now isthe imegi anon 01 militant! set-asideph/ (es a ith sod comersation needs. Asimin s atia:sst Kenneth Cook obserses.the Untied States has 'Ito polies to usethe good Lind In 1/1 Oct ence to the worstIndeed. with testi« I to mail him, exportdemand to the needs of I...S.1W met s andtheir land and to the needs of peoph andiesources m the c_ 1 esel oping world, isedo not Ihoe responsible polies at all. We

t .

has e a ssmple-minded sales quota. '42The economic and political pressures

to produce more food in the short rim.with little regard for long-term onse-quences, has c permeated the world foodeconoms. For Third World countries,elle( us e soil comers ation initialises arepat tieularls &flit-tilt: complicated byfragmented landholdings. The lack of ,itechnologic all% sophisticated farm pop-ulation makes the implementation ofcomers ation tillage a difficult undertak-ing.

Although thew are no national suc-cess stories. (her e are 4xc asumal signs ofhope. One is the trend toward reducedtillage in the Uhued Stalest which wastrigge -d bs farmers' desire to reducefuel consumption and operating costs.Although so far the farmers who areturning to reduced tillage are not usuallsthe ones with the most sapidls erodingsods. reduced tillage may become aneconotnicall attrartivr first line of de-fense against erosion. particularly giventhe high cost of (instructing terracesand adopting long-term rotations andother traditional approaches to soil con-sers ation. Stabilizing soils that underpinthe global eonoms will require wide-spread alterations in agricultural prac,tices. including a reevaluation of the roleof the plow. The changes in agriculturalpractices required to arrest soil erosionwill not come easily.

Another ent °waging development isthat the international scientific comm.ails is beginning to respond to the ero-sion airwi. as evidenced by severalrecent conferetuv and specially om-missimied studies. The InternationalCongress of Soil Science, which metin New Delhi in 1982. focused on theneed for a world soils polies.' h earls1983, the Soil Conservation Societs ofAmerica convened an international con-ference on soil erosion and conserva-tion; sonic 145 scientists from aroundthe wort i r esemed papers. And the

88

,

s

Loorterving Null% "u.

Amen( mu So( lets of "lig' (monis te«.101%published 1,10( eedings of an intetna-(tonal ssinposnun on soil elusion in thetiopu s. 43

User the huge' ((Int. soli et oston %illlead to highet food pine,. hungei . (Indquite possibls pet sistent po( Aet, of fain-toe. Although the soil! emtioine 114,sse.itheted a sesetalf old in( I ease in thepi 11 c-ol oil met the pal* decade. It is not%sell equipped to tope %Ilk es en modest*be, 10 the pine of food.

In the Awn( e of sin cessful eflot is tomein the loss 01 topsoil. the Sot 101 elle( Isof et ((slob voll probabls lust be seen inAlin 4. itPthe fount 01 .1t tile food ,111111-age, and higliet mot Was tales. parts( tt-

.I.

i

lat is lot inlimis. .111 la, 1 e( old popula-tion gifm(11 .1nd tamihini .mil elusion.and the absence of an efle( use responseto either. combine to ensure that the( olument sill he at the lot efrom of dosunfolding global (list,. What r, at staket, um meld% the dew:Walton of sod, butthe deghulanon of 1de itself.

111,tornls. sod et osion ssa, a 10(41plobletn. Indisulual ( is duanon, %hose'food s stem, sere widertnined in earliertulle, de( hued in isolation. But in thenuegtated global e«nunns of the latemonied! (emu's. foodlike oil -1, aglobal (ottunodits. 1 he ex( essne los, oftopsoil mis %here uhunatel Ale( is foodpt ii es es (Ts whore. k

-',....k

89

,

..,

5

Protecting ForestsSandraTostel

Sustaining the wood's forests presents .1%111.1)01 global challenge. IVith e'ergi eater demands fat fuels ood and woodpiodm is and lot land to feed `growingpopulations, ['lesson.% 00 finest!, neatlyes elm hoe are inneasmg. In the Imp-it dns pressure is most sisible in thedelinestanon Of al least 7.5 million bec-tales of closed lorest and 318 millionhectares of open woodland moth searan annual loss the si.... of Austria andAlbania combined. At this rate, tropicalforests will shrink In 10-15 percent bythe year 201)0

In some temperate regions, where thefin ested area.has been quite stable. anpollutants sinfi as sulfur dioxide. nitro-gen oxides. and heats mewls are threat-ening future forest growth and produc-inns. The ultimate extent and severityof this li...1 in lemmas a large question.Vet existing circumstantial esidem e ofinglinion-induced damage now tenderscontinued Icy els al forest produltisittlughls questionable in important re.gums. pai Initials cent sal Europe andeastern Ninth Amei U .1

Defoiesianon appears in be affectingnot only om natural sistems but oure«momic am: social systems as well.Fuchs ood is bewuung too expensise to

'. 1

buy and too scat( e to gather for many ofthai third of humanity who have no othersource of cooking fuel. Floods anddroughts that many believe are more se-, ere because of deforestation have costmillions in lost crops. cattle. and humanlives. As never before, unmitigated ero-sion of the natural resource base is hav-ing deal ly visible economic and socialcosts. ...7

, THE FORCES BEHIND(... DEFORESTATION

Most numbers describing the world'sforest resource base and its destructionare estimates at best. Many countrieshas e not yet fully catalogued their forestresources and the quality of availabledata ,.tries greatly. The most thoroughstudy to date of tropical areas was comp-leted in July 1981 *by the Food and Agri-culture Organization (FAO) of theUnited Nations) though compreten-ski: in scope, the report may be overlyoptimistic in light of FAO's obligation toa( cept official figures from national goy..ennui ms. figures that may not be wholly

90 e

Ptak( Sing

atuthit Nonthle55. du moth, whit IIMt lulled 1 Olt esp011tltil e nil if; 11 opt-f ol «ninnies and the let Itd Ilse Of settelliie midget 5. goe. .1 bug wo towardClot unwitting the t tit trot .i.itti. of Hopi-to' lo.' t.fittit

Combining FAO e.i ittiote. tot tt 4 PIM 41wpm. with I S Count 11 lot Eit% um-memol (built% figure. fto the i.t of thewoe le! %Kids .t totigh pu lure of thewoad'. lotr.i., Wooded lands of all(. m( About 4.89 billion het totes.4111 area 11101 e 01.01 I r11)1V that HI Mips(See table -1.) 01 holt 1t_115 oleo 15(I ".. d J.) (lasd 101 ("Nis. whet thebode 11011 nee f 1055 Its pretent5 5111)-5rounol };lowish of gto.5. Nearl holfthew .ue.s. die In the i mint.. with Southand Centro' Amen( A of tainting lotone-fittattet f)1 the timed lore.ts world-wide..ihoin 25 pttei u 01 die total fm-e.td oleo 1 open wootilatullie.is (IImixed f Ofesi and gto51And twilled Inthe (:erratic) to 1 ;..a/11 And the wooded.ottitolt of 'Aft If o. "1.0re.t follow- t-lei In Are.t. t leaved for ogrif ohm e atulIn al WON slatges Of tegtowth. silt It Arco.111.1% Agouti 5uppott .0 tutu tol 01 noniron

tot rits t 75 I

tegenetAted burst. Shtubland5. whichNu( All .uppolt egetanott no toile:-than 5een mewl.. Mt' NO weirl de-graded. cutlet be( Aloe of .1 %et% .horsfollow period of et poor .fi «nub-non.. that natural fotest It-gem:di is it -moll% unpo.mble,T

1 bough f on% et 10n. of lout...timid areof t int tug e% el %. heir lot g -n ale f le.ii -mg of fore 15 takes plate !initial-11 inthe trope .. At lewd some of the continu-ing (maner.% er row. of tropical

lost-datum ders from ( onfusiohmet. 41 (I11010011 of lei Ws. FAO. OW 01the word includes t (mildw ( !coring 0110;et for some ohrna ti. of theland. Not included in their estimates Areother. less ( (mildew forms of alteration(from selecte logging. for example)and the gradual degradation from prof -titre .tic h as i (pratd burning dud met -gta/mg. A«-ordnig to FAO. 7.5 millionh( idle. Of t losed forest and 3.8 millionhf tare. of open woodlands arc beingcleared each Car. for an annual tropicaldknotum rate of I 1.3 million hec-tare.. Self test logging is thought toalter an additional 4.4 million hectares

Table 5-1. The Global Forest Resource Base

es

r.

RegionClosed1tuesu

Opel)1Vocsil.oml

Fou e.1

Fallow andSIB Aland e 1.01.11

1 o opt( Al .1 merit .1

1 (opt( al Alt It al'ropit al A51.1North .1tairlit .1bil apel'SSRPot ifn .urea

101.t1

67.l21730517011078r)

81)

2.676

...

I

limn21718631

176

29115105

1.159

Ii sate.)

316609109

1

15.1

/ 51.055

14212

1.31

445646170

915190

.89050114115 t .o swan . itol lloplo.11ii tzifill Iii 141$111.47111 1 11111.1) \.1111.11.1 Faced moil Agin ilium. I n g.onol.owon, bopkd i oorit Awo. /1 I orlil P.111t1 34) IRIPItil 19811. ( %WWII.% tot ten0.1 $$$$$ og sgolow Joyfor earl. to mod-sntocs Ippon town II on boil onmental (.bo.olio Joni ( S Drihotooneno .4 Some. b...mo4iat Ziont ft,poit to dr, Prewlent %ohmic 1 i.1.1ntigton. D C: t' S Gino inherit Polliwog ()flue.19801 Inuits'. of We clolletno geoigtmolio tooloosiong. tied on ol.r moo soothe.. thy low-so Il'urlItIClit ..r.epai 4 MIMI ti.% .01 C 1,111114«i. 1611101 1111% 10111111 not wrath 41411 the orgoon.4 tout.

91

d

1:4

176, Nate of the Wodt1-198.1

per yai 1)i Noini.in Wet.. a t M ItII-Lint on tropical forests and hnniei resi-dent of East Africa. estimates that f on-vet sion of-all typesfrom deforestationto the lessei hums of de giadationis onthe ender of 20-24 million hemlines petyea'. %els'. most iment es11111Ile Of(Jelin estal ion of dosed ((nests is 0.`._ trill-im hectares pi Veal. slightly greaterthan FAO's figure.'

Act oi ding to the F,'() study. (ter halfthe 7.5 million het laws 01 dosed 10resit !caeca atinnally at e in South and (*.m-oil! America. (See !able 5-2.) Emestsare dininushing at an equal taw in allduet. (topical regions of the world atabow 0,61 pet( CM per year. 01 the openw oodlaiedc. cleared each sear. (i0 percentof the dkiestation Is occurring in:Urea. with its large expanses of north-On %.1Valltia%,1,10%1 01 the te51 takes placeIii nopu.il Ameiica On ay mtge. 1158',m em of .111 open woodlands ate losteach teat. If these deforestation late%l out mile. tropocal forests and woodlandswill sin ink by an additional 10 percent bYImmo is end.

1Vheieyi It is mewling. deltnesta-olon is .i clues manifestation of pressureplaced on the natural resource base bythe et anomie and social systems it sop-pons. Fundamentally. these pressuresat e rooted in using populations and i is-

Table 5-2. Projected AnnualDeforestation in Tropical Regions.

1981-85

Ke)oon(:fused1.0t esi

OpenWoodlands

(million he( Imes)i rola( al Amen( .1 1 34 ' '27I tops( 4 .th n a 1 :1 :1 2 rI ei)pi4.il .%.i.1 I8 :3 019

I olai 7 50 3.81

sot to 1 1 lletd Anon. food and %got uhon 0) -gaill1d0001, hoptral fewi 10.00,0 Igiet.sti% Paper3 clients 19821 i

1

e3

lug incomes. the former driving the needfor agi is uluiral land and wood for en-ergy and shelter. and the latter for forestproducts to meet consumer demands.With few exceptions: populations intropical countries are growing between2 and 3.5 percent per year. Conversionof Ii>resdand to cropland is by far theleading direct cause of tropical de(nes-ninon. Such conversion is often neces-sary: Agriculture is clearly the mostbeneficial use of land in some areas. Thetragedy in the tropics is that increasinglythy finest is cleared by landless peasantsts el h no alternative for a sustainable We-st% le and it is happening either on landtoo infertile to sustain crop productionover the long term or in a manner thatprematurely depletes the land's produc-tive capacn y .

Shifting cultivation, which for centu-iies provided a sustainable agriculturalsystem. has Woken down with the popu-lation buildup of recent times. Tradi-tionally . lamer, would clear some for-est. grow croii.. until the soil became toodeficient of nutrients, and then clear anew .nea. returning to the original plotperhaps 20 years later. By then the landhad lain fallow long enough to regain itslertilitt and could again support crops.But in many situations population densi-ties no longer allow for the 10-20 hec-tare, of land per person needed to sus-tain this farming system:1 The land isen eiused. additional forests are clearedon soils that cannot sustain crops. anddestruction spreads.

The new pattern of shifting cultivationis destroying fbrests and degrading soilsin all tropical regions. The FM) studyattributes 45 percent of all forest clear-ings to shifting agriculture, though theproblem varies by region. being the prin-cipal cause of 70 percent of the dosedforest clearings in Africa. nearly 50 per-cent in tropical Asia, and 35 percent intropical America. Areas where defor-estation is most pronounced are predict-

92

0!

(S.

;

;

Niter hug ta"i%

Al% those while population delositisare high Nine «ninnies of %lest At tit a.%%h the population dnsin is dittime that Of ant iiilu Alm an legion.at A 0111t1 lot half the tot est losses in I i op-t ,t1 ,Ifiit,t Closed Imes!. in the iegnmale diminishing at an annual i ate of beosen I and ti pelt rm. and the 1.1( ) re.putt (1.tinis that the pilitziessnc disap-..pv.11.1114 e of the l thenal flit 4-1 -Is aft 16.1(1.1 Lit I In «nil hen, the (..mief I toti-CAt-golese finest.. itt Citti.il .11t1t.t, wherethe population densiit in loiested ,tie,e.P. less than a tenth that iii %lest .Ifin.i.air inn %co ( not alb thicatened 1..osesthew attlage 0.2 pet «lit per %eat.%

Conversion of forestland to crop-land is by far the leading directcause of tropical deforestation.

hxamples .11)00(1 A it le (1 est'. sue With-10g 10 siof mig '1.'111%411nm, A stud% In the

'Indian Institut of Soent (*.Mutedthat met kW the finest hr.se:. in 110Mbetween 1951 and 1976 were hom ton-t ei stow. to .tgl it tilfinal Lind. where pfl-timid% die Lindley. woe "encroachingon good finest. to bring the land undercultnation.-6 In I flatland, 30 seals ofelfin' In the Ronal Foicst Setae e failedto stop the cm, mu Innen' of shilling(tiltnatois nu() nottlion lowest.. whewlotest destitution has been on the ot -der of 100.000 he( tales pet teat .7 Some50.000 landless peasant famtli inI encitiela Ihn been ( leal :lig 85,000Iv:times of lotest sae i %cal l` Pei hapsthe most sti dung sue of shifting ago( ul-tin e' ell( is n m the Pei in tan Andes. aslandless In mei. push lilt diet toward theAmami plane.. In the Philippines.Nepal. northeasicin India. and man%otht at seas. Mt t .ving AJlt if% tifland V.lotting sinking ( tiltnaiots up forestedhillsides"

1 77 )

10 allc% tate population sttSSs s01114«num les, most noitibl% in Asia. aledealing forested land to e tit otnAge peo-ple to migrate to less populatedleroto-ries. I be Indonesian Cove' inner hasbeen Inoung families from Bah and Javato the less populated islands of 1011filan-Mu and StItlinfin. Fotest on these is-lands ale inindlt bring (le.ned MO 1 (6-pLit 16(1 tt nil ago( ul. tie of relatneb lowptotim thin, Sunda& . planned «dom-/anon in NUL% ma is causing «an ersionof lowland forests to plantations of palmoil and itiblici ,11)

No ( kale) ( MIMI t1011 betweendloretation and the demands of afflu-nt sot tette.. can be found than in the

comrsion of tropical forest to grazingland in Centwal America and Brazil.whew cattl -raising offers export earn-ings that oulel help redtu- externaldebt. Braid kJ. In L11 the greatest areaof trop1( al moist lorest m the world:280-300 million hectares. triple theaminii in either Zaire .or Indonesia.0% et -10 !tenon of that lies in die ma-ion Basm, where population pressuresate Mal MIIIIIMIL The nation's stagger-_mg!) high foreign debt in recent years.now about $90 billion. explains win Bra-/Mans pots t leW the rich Ainaion forestsac an asset that can no longer be left-unused... Between 1966 and 1978.sont eight million hectares of Amazonlot ?st be( ame cattle tanches."

1.1 Cetin al Amerly giving land morethan doubled between 1961 and 1978.while wooded land diminished by 39pet(n. (See Table 5-3.) U.S. demand.lot heel has fostered considerable con-% erS1011 of 101 C1.1 to pasture. A little usertwo decades .tgo. the United states int-poi teed ooh 2.000 tons of beef. By 1978beef unpin is bad risen to 100.00 ton.111d. althotigh Milt a portion of thesetame hom Central Amei i( a. six out ofthe esen ( (ninnies ,there were sendingas tutu h as 85 to 9() percent of their totalbeef exports to the ('niti.1(1 States."

33

(781 Stole of Mr World I984

Table 5-3 . Central America: Conversion of Forests to Grazing Land, 1961-78

Couturt

Graintg Land 1.'g n est s and %V< ,o(11ands

1961 1978 Change 1961 1978 (:hange.

(thousand het tgrs) (pre tent) (thousand het tat es) + (percent)Costa It it a 969 1.71;4 +82 2.848 1.930 , 32.1 Sal% ador 606 690 +14 230 - 0 100

Gtsaitnal.1 1.039 1.976 + 91) 8.400 4.400 48110ndut ask 2.006 '2.370 +18 7.100 3.900. -45Nicardget 1.710 2:820 +65 6.32 4.400 32

4. Panama 899 1.4'30 + 59 41.00 3.200 2I out! 7.229 1 1.050 +5:3 29.110 17.830 39

sot ret.1 Normal %en. " I he 11.nobutget Comet 11u% CentralNorth Arocria. 11.mthorgers." :baba°. VW X. No I. 198)

, Mut h of that beef feeds the growingdemands of U.S fast-food outlets. one ofthe few markets open to leaner beefhom grass-fed tattle. Fast-food chainstan °Het low .prn ed hamburgers byusing beef wised by low.tost Jabot ont on% et ted lorsiland in Central Amer-ica. Few people are aware of the hullconsequences of each bite into a fast-food burger, which Norman Myers hasaptly ( ailed "the hamburger coirec-tioo.""

Unlike forest coin ersions for agricul-ture and grating land, fnelwood gather-: ,mg o, final peasants rarely results in anIntl nediate loss of a large block of closedforest. But the gradual degradation ofopen woodlands by fuelwood gatherersnim es entual4 produce a sirtual waste-land. With fuelwood gathering, as withshifting cultiation, it is primary 4' popu-lation pressure that has transformed apro tomb sustainabse practice into onethat is gradually destroing the resourcebase."

For that one-third of humanity forwhom firewdbd is the primary sour& ofcooking hid. demand will increase apacewith population growth. Moreover, thefuelwood and charcoal needs of auemerging industrial sector are begin-ning to compete with those of fuelwoodgatherers. In the southeast of Brazil, an

94

Arno tc.t'. Forests Bet ant

estimated 38 million cubic meters ofwood are converted annually to charcoalfor the steel industry-." A growing com-mercial market for fuelwood also createsincentive for "entrepreneurial cutting."Near Nagpur. in central India, wherepeople arc permitted to collect deadwood in forest reserves for their domes-tic use, trees are apparently being cutillegally and taken to the city for sale."Myers has estimated that some 150 mil-lion cubic meters of wood are cut for fuelfrom tropical closed forests each year.The extent of the resulting degradationof woodlands is not known. In fuelwood-short areas of Africa and Asia, however,people are having to turn to crop resi-dues and cow dung for fue1.17

The role of timher harvesting in tropi-cal deforestation is difficult to assess.FAO estimates that 210 million *taresof closed forest have been logged so farand that 4.4 Million hectares of virginforest are opened for logging each year.Because of the diversity of tree species intropical forests, commercial loggersgenerally cut very selectively, taking onlythe most valuable species. Cutting in,,,,hardwood forests is particutily selec-tive, with removals from a first cuttingaveraging 8-15 cubic. meters per hect-are. In Southeast Asian forests, wherethere is an unusually high density of

. , t,

.

1'retteartig

l muffle-m.111% %Arabic spec les. haid-wood remosals aseiage owl 30 cubicmeters. pei hectare.ls But esen thoughmil% 5 pen ern of the flees On a gisenhectaiema% be i 111. the trees are so l losetogethi and «rimeoecl b% sines thatlogging can destios 30-60 pet 4 ent of theunwanted trees " Nforetei. duce-quat lei s of logged forests aie left un-'managed at lei the fist cutting. Thuswithout et cimmin 'menthes or regula-tions to em (image moieeflicient use41nd better care for these loiests. largenumbers of trees are destimed for aretain el% small amount of wood actuallysold

ACID RAIN: AN EMERGINGTHREAT

Acid deposition. «mimonl% called acid1 am. is the tom pen to sulfur and ni-trogen oxides thin are chemnall% nans-I ormed m the atmosphere and fall 10eanli as at ids in lam. snow at log. or asdi %. 414 td -feet ming pat tit les. Scientists/lase amassed f OliSidelable e% Mem e

riser the past decade that these air pollu-tants ma% athr set affect the ecosys-tem. the% entN. Although documnta-i10I1 of aculthing lakes in Scandma% ia.(ean North Amok a. and Canada isnot new. esidente Is mounting of aciddeposition's se% ere threat to some of the

... world's nurst %Area forests. Until re-4 end% the link to the health and Kochi( -tnit% of 'mese, was laigel% spec. ulatne.and documentation of sen potentialeffects was 't(a)«.. Studies Of sick andthing 'lees m Europe and eastern NorthAm« it a. In owe% ei . Mc leading reseal( h-et. to pm lot Ili the, link with waterconfident e.

0%er 560.000 he Of forest inWest Germans. mail 8 percent of the

Fotests i 791

nation's lorests. showed damage in thefall of 1982. Just one %ear later. follow-.mg an extensive nationwide survey.damage has estimated to cover one-:third of West Germany's forests.Whereas 60 percent of the fir trees wereAlerted m Pate 1982. three-quarters ofthem weie suffering the following %earDamage wits also %nable on four of es cryten spruce trees. which cmer roughly 40percent of West Germans forestlarid.28

By 1990 as much as three millionhectares of forests may be lost toacid rain if Poland proceeds withits present industrialization plans.

In Czechoslovakia. 5:0.000 hectaresreportedh are damaged, with treedeaths widespread in a mountainous for-ested park near the East German bor-dr.21 Another 500,001 hectares areaffected m Poland. Forest researchersin Katowice. close tdIKrakow. say thatfir trees are dead oz dying on nearly180.000 hectares and that spruce treesin areas around Rybnik and Czesto-chowa. also in the industrialized south-ei n region. are completely gone. Envi-ronmental scientists warn that by 1990as much as three million hectares of for-ests ma% be lost if Poland proceeds withits present industrialization plans."

In the United States. detailed docu-mentation of systematic forest destruc%non has come from research on Camels!lump, a peak forested with red spruceand balsam firs in the Green Mountains tof Vermont. There. after nearly twodecades of study and with the benefit ofa, complete inventory of the tnountaitt'ssegetation. researchers at the Universityof Vermont have found that half thespruce trees have died since 1965. More-oser. seedling production, tree density,

95

A

...

( 80 1 Slate of Mr Wald-198.1

and basal area !we also been nearlyhalved.23 '

Reports on the current extent and se)erity of forest damage may belie thetine magmtude of an impending prob-lem; The prow ess leading from slight toeXICI1SRe daniage appeal: s to unfold ra-pidly: Widespread loss of sib er In treeshad occurred in West Germany within afew ears after the first signs of damage.And it it not always easy to recognise theS% tripwire,. Without carelid qbservationby a well - trained e% e, eat h signs of dam-age may be nerlooked. Memo% el, diepattern of symptoms. such as discolora-tion and needle loss. may vary among"spe< res.

scientific evidence of acid deposition'slink to thus massue forest destruction isthus LIT 111«,sulusne. Indeed, needlediscoloring arid A thinning of treecrowns can be caused by many things:host. drought, wind. attacks by nue( tson fungi. and even poor lowest manage-ment practices. But none of these CAUSCSalone seems to be sullu lent to explainthe PaliCiiIN or forest destruction ob-sen ed. As 11n of Vermont bota-lust !When Vogelmann writes regardingthe massne spruce deaths on Camels!lump, "With many of t' :normal causesof tree mortality ruled out. suspicionsha% c turned to one ingredient of our en-% monition that has been introduced inthe last thiit yearsac.id tain."26

In recent deo ades. the acidity of rainand snow has increased markedly inmany locations. In widesprerid areas ofeastcin North Amcnca and northernarid o ential Europe the annual a eragephi of preo ipitation .s now between 4and 4.5. For comparisod, the pH of un-polluted rainfall is typically no lowerthan 5.6.: lightly acidic from interactions 'with natural carbon dioxide in the atmo-sphere. Rain and snow in many indus-trial regions of the world are now 540times more acidic than would be ex-pected in an unpolluted atmosph. re.26

96

This dramatic change is attributed inlarge part to the release of sulfur andnitrogen oxides into the atmosphere bythe burning of fossil fuels and the smeltlug of ores. Since forest systems can usu-ally benefit from additional quantities ofnitrogen, sulfur compounds are gener-ally considered to be the primary con-( ein. Tbe scientists studying West Ger-many's lowest% found that the needles° oftrees in severely damaged forest areascontained more sulfur than those inother areas. Also, damage was greateron west facing mountain slopes. whichare exposed to more pollutants and aciddeposition.22

In portions of Europe, sulfur dioxideemissions from human actisities havedoubled since 1950. Excluding the So-viet Union (with estimated emissions ofover 25 million metric tons per year),annual sulfur dioxide emissions innorthern and central Europe now totalnearly 27 million metric tons. Six coun-tries account for 80 percent of this total:the United Kingdom, East Germany.West Germany. France. CzechoslovaRia.and Poland. Sulfur dioxide emissionsfrom North Amenca are estimated atnearly 29 million metric tons per year,with over 80 percent from the UnitedStates.28

Before the advent of air pollution con-trol strategies, most pollutants emittedto the atmosphere remained relativelyclose to their source. Between 1956 and1976, however, the average height of-thestacks at fossil-fueled power plantsnearly tripled, as higher stacks were seenas better dispersers of emissions fromsource areas. Pollutants thus began totravel farther before returning to theearth's land and waters. Also, the longerthe sulfur dioxide was in the atmo-sphere. the more likely it was to be oxi-dized to sulfuric acid.26

The precise mechanism by which aciddeposition may be damaging trees so ex-tensively is not known. Hydrogen ion

Protecting Forests (81)

concentration. the measure (1tidily ex-pressed as pH, affects interactions be-tween the soil and living biomass of anecosystem in complex and varying ways.Soil structure and composition. vegeta-tion type, climate. and elevation arc onlysome of the natural determining varia-bles. Yet scientists have uncovered somecommon effects of increased acidity insoils_ Among the most important is theleaching of vital life-supporting nutri-ents as the hydrogen ions react with soilmaterials and time buffering capacity ofthe soil is depleted. Both scientific the-ory and observation suggest that re-duced quantities of nutrients such as cal-cium. magnesium. and potassium maybe widespread in vulnerable soils afterse eral decades or (-omit ics of exposureto acid deposition. In addition, severalstmlies hoe suggested that o soils be-come more acidic, aluminum. which isnormally harmlessly bound in soil con-stituents, becomes soluble amid toxic.30

Areas now witnessing the death oftheir lakes may soon be confrontedwith dying forests.

Dr. Bernhard Ulrich. a biochemistwho has studied damaged beech andspruce forests in Soiling. West Germany,for nearly two decades. has documentedseveral phases in the acidification of for-est systems. During the early stages. nu-trients such as nitrogen added to the soilby acid deposition appear to increasetree productivity and growth. Between1967 and 1969, the beech and sprucetrees he studied showed double the ex-pected growth rate. Yet during this pe-riod of increased growth, adds are build-ing up in the soil, eventually triggeringthe leaching of vital nutrients and rend-ering aluminum soluble and toxic. Whenthe toxic aluminum begins to attack the

root systetn, a tree becomes less ahle totake up moisture and to protect itselffront insect attacks and *oughts. Theforests are also attacked from above byheavy metal and gaseous pollutants in-tercepted by tree crowns. From the pat-terns of tree damage he observed in Soil-ing, Ulrich fears that every few years toevery few decades a natural event willoccur that, because of the accumulatedair pollutants. will cause fatal tree dam-age.31

Laboratory research at the Universityof Vermont has shed additional light onthese processes, providing evidence thatacid deposition and heavy metals actsynergistically in stunting the growth oftrees, mosses. bacteria, algae, and fungi.This research also shows that loss due toacid rain of mycorrhizae. fungi essentialto the health of a forest system, may playa role in overall forest destruction. Fur-ther. analysis of tree cores by these re-searchers lends credence to the link be-tween acid rain and the mobilization ofaluminum. The amount of aluminumin the wood was relatively constantthroughout time first half of the centurybut began rising dramatically in somesamples around 1950, about the timeacid rain became more pronounced.32

Though fragmented and inconclusive,this evidence of acid deposition's effectson soils and forests can no longer beignored. If Ulrich's description is accu-rate, areas now witnessing the death oftheir lakes may soon be confronted withdying forests. His findings offer a gravewarning: Waiting for declines in forestgrowth as the sign of damage from addrain ntay mean recognizing the problemin its advanced stages, perhaps when thedamage is irreversible.

Although the amount of forest de-struction that will be caused by aciddeposition is a matter of speculation,both scientific researchers and politicalleaders are recognizing that the risks aregreat. Referring to the potential effects

97

(82) State of the World-1984

of acid ram on Canada's $20-billion 14-est industry, John A. Fraser. member ofthe Canadian Parliament, remarked inOctober 1982 that "the economic cost ofdoing nothing is staggering."" And inlight of the large wood-volume declineson Vermont's Camels Hump since 1965and the 57 percent drop in maple seed-lings and saplings. Hubert Vogelmantiechos this concern; "If such losses inonly a few years are representative of ageneral decline in forest productivity,the economic consequences for the lum-ber industry will be staggering.''39

One obvious remedy s to reduceemissions of sulfur and nitrogen oxidesto the atmosphere. Without waiting formore solid proof of add rain's link toforest destruction. the West CermanBundestag passed legislation in early1983 aimed at reducing sulfur emissionsby a third within ten years. Yet even ifWest Germany succeeds in meetingthese goals. the reduction of sulfur diox-ide in its air will be much less, sinceabout half the emissions originate out-side the country. West Germany is alsoattempting to mitigate the existing dam-age by adding lime to soils in damagedareas to counteract the acidity."

No doubt this link to the world's for-ests will heighten the international acidrain debate both within and between na-tions. It also implies that continuedgrowth and productivity of some of theworld's temperate forests can no ' ,ngerbe tacitly assumed. Developed countrieswith energy futures based on fossil fuelsmay need to reexamine the wisdom oftheir strategies and weigh the costs ofpollution control against these newrisks. Moreover, large portions of Brazil,southern Africa, India, Southeast Asia,and China have soils relatively suscepti-ble to acidification.36 As nations in theseregions establish ambitious industriali-zation plans. in which fossil fuels typi-cally figure strongly, they must considerthat the means to their ends may under-

98

mine a more important and sustainingresource base.

ECONOMIC EFFECTS OFDEFORESTATION

Deforestation has thus far been fosteredmainly by pressures to grow crops tofeed increasing populations. WI:etherconversion is planned by governmentsto relieve food shortages or results fromlandless peasants seeking to survive,tropical forests typically have beenviewed as an underused asset at best andan obstacle to development at worst. Asforests dwindle, however, this view isbound to change. The growing scarcityof forest products will increase the com-parative value of these forests and theproducts and services they provide.Signs of scarcity typically take two forms:shortages and rising real prices. Ulti-mately, scarcity fosters a shift in the waya resource is valued, used, and managed.

Firewood scarcity offers the most visi-ble and dramatic example of deforesta-tion's effects. In developing countriessome three-fourths of the wood har-vested is used for fuel. These countriesboth produce and consume 90 percentof the world's fuelwood; only one-tenthof 1 percent is exported." Already, fuel-wood scarcity is taking a heavy toll on thedeveloping world's poor. With 90 per-cent of some national populations rely-ing on firewood as their main fuel, nu-merous local and regional scarcitiescollectively bode a crisis of critical pro-portions.

In many West African and CentralAmerican cities a typical family mayspend one-quarter of its earnings onfuelwood and charcoal, a proportioncomparable to what a family in an afflu-ent society might spend on housing.

Protecting Forests (83)

Where wood is gatheted t Awe thanbought in a market. scarcities meanmore time spent collecting wood for thefamily. In some parts of India, a womanor child may need to spend two full daysgathering a family's weekly supply ofwood."

Fuelwood scarcity has fostered a dra-matic rise in fuelwood prices in recentyears. Whereas the real price of fuel-woodthe price adjusted for inflationshowed no increase between l963 and1978. it went up by over 25 percent be-tween 1978 and 1981. Since link of thiscommodity enters international markets,absolute prices and the tre.nds in specificcommies may vary considerably. InDacca, Bangladesh. the retail price forfuelwood was in some years twice that ofthe average world export price." In In-dian towns, rising prices are Fast makingfuelwood purchases impossible fin- manyresidents. Between 1971 and 1980., thecurrent-dollar retail price of fuelwood inBombay more than tripled.40 Price in-creases in Africa ate equally telling.Fuelwood retailing for less than U.S. $8per cubic meter in 1976 in the CentralAfrican nation of Cameroon sold forover $44 itt 1981. Most extraordinarywas the situation in the Ivory Coast inWest Africa: Between 1976 and 1980 theretail price in the coastal commercial city

of Abidjan jumped from $26 to nearly$250 per cubic meter.('

These shortages are bound to worsenin the decades ahead. FAO projects thatby the year 2000, the minimum fuel-wood needs of some 2.7 billion peopleover hall the developing-world popula-tion projected for that yeareither willnot be met on a sustainable basis (a defi-cit situation) or will not be met at all (anacute scarcity.). (See Table 5-4.) The sit-uation is already a dire one. In 1980, anestimated 112 million peoplehalf ofthem in tropical Atilt awere experienc-ing acute scarcities of fnelwood. Nearly1.2 billion people-70 percent of themin tropical Asiawere meeting theirminimum fuelwood needs only by over-cutting and depleting their forest re-sources. In all cases. rural people are thehardest 11it.42

Wood shortages in some areas are re-ducing incomes and jobs. Basketweaversrelying on the bamboo stocks of TamilNadu, at the southern tip of the Indianpeninsula, reportedly now earn 25 per-cent less than in the early seventies andstiffer periodic bouts of unemploymentbecause of insufficient bamboo supplies.Stocks in the Western Ghats forests wereonce thought sufficient to keep localpaper mills supplied indefinitely. Yetbamboo shortages have forced the in-

Table 5.4. Populations Whose Fuelwood Supplies Cannot Be Sustained, 1980,With Projections for 2000

1980 2000

Acute Acute ScamtRegion Search }t Debt its or lkiicit

(million)Tropical Africa 55 116 535Tropical Asia 31 832 1,671

Latin America 26 201 512

Total 112 1,179 2.718

illucl%ood cortsumpilun is helot dim requ.m1 to meet stimulant, needs.?Minimum fricNisoil needs are met, but mils h% oserruning and depleting wood resources

souk(;. Vaned Nai,mic Food .isul Agruulturc Organtratum. hopiral Font Remoras. rumors raper30 (Rome: 1982)

$9

84) Stato of the WorldI984

dustry to operate at 70 percent capacity,compared with 90 percent in 1970. andsome of the bamboo now comes fromnortheast India and the Himalayas. Theplywood, match, and polyfiber indus-tries in India are also facing shortages.43

The cost of repairing flood dam-ages in India below the Himalayanwatershed has recently averaged$250 million per year.

Though rarely valued monetarily, theloss of the ecosystem functions providedfreely by a natural forest entails real eco-nomic and social costs. Flooding,droughts, and siltation in many parts ofthe world are more severe because ofdeforestation. A half billion people inIndia, Pakistan, and Bangladesh areaffected by water runoff from the upperHimalayan watershed. Deforestation ofHimalayan hillsides has greatly reducedinfiltration and the land's ability to retainwater. Rapid runoff during heavy rainsand the resulting soil erosion and siltingof rivers sets the stage for massive flood-ing downstream. The cost of repairingflood damages in India below theHimalayan watershed has recently aver-aged $250 million per ey ar.44

In the Philippines, a government re-port blames deforestation for frequentflooding, erosion, the silting of rivers,and a loss of water supplies. Silting ofthe reservoir behind Ambuklao Dam hashalved the hydropower plant's expecteduseful life.45 Haiti's largest hydroelectricproject may not survive past 1986 be-cause of silting behind the Peligrec Dam,and electricity rationing has already oc-curred in Colombia and Costa Rica be-cause of lost reservoir capacity at hy-droelectric facilities. Deforestation inPanama, besides causing siltation that

100

threatens the viability of the PanamaCanal. has worsened both floods anddroughts and rendered water suppliesless reliable 46

The full effects of deforestation on na-tional and international market econo-mies are difficult to predict. With the ex-ception of fuelwood, most forestproducts are part of complex interna-tional trade patterns. There is thus thepotential both for shortages to echo re-soundingly in faraway regions and forareas of continued forest abundance tofill in etnerging supply gaps. Yet anychanges in regional balances of supplyand demand can shift and alter pressureson remaining tropical forests.

Demand for hardwood in the indus-trial countries for houses, furniture, pan-els, and other products has risen greatlysince mid-century. Attention increas-ingly turned to the tropical forests,where hapiwoods often comprised over90 percent of the timber resource andlabor costs were comparatively low.Consequently, annual production ofsawlogs and veneer logs, the primaryraw material for wood industries, morethan doubled in the tropical regions be-tween 1960 and 1980. (See Table 5-5.)Tropical Asia consistently dominatedthe production picture, accounting forhalf the average annual production inthe early sixties and 58 percent in theseventies, over 95 percent of which wasin hardwoods.47

Much of the increased production wasshipped to Japan, North America, andEurope. These areas used 13 times moreindustrial hardwood logs in 1973 than in1950, while consumption in the tropicalregions themselves increased by only 2.5limes. imports of tropical wood over thisperiod increased ninefold in the UnitedStates and Europe and nineteenfold inJapan.48 About three-fourths of Japan'ssupply was from Southeast Asia. Much ofthe tropical hardwood imported to theUnited States started in Southeast and

Protecting Forests (85)

Table 5-5. Annual Production of Saw lop and Veneer Logs in the Tropics, 1961791

1061-65 19r4-70 1971-75 1976-79

(thousand cubic meters)

Tropical America 22.360 26.420 32,260 42,390Tropical Africa 10,320 13.660 15.760 16,710Tropical Asia 32,050 47,020 65.320 80.020

Total 64,730 87,100 113.340 139,120

'FAO now, that thew figures do not Include illegal loggmgs which in some countries may be 30percem or ;mice of lecorded volumes,sovitt.a. tinted Nations Food and Agriculture Organnatton, Tropwat Forest Ramon% Forestry Paper30 (Rtinte: 19621

East Asia. often going through Japan forprocessing. Tropical hardwoods used inWesteni F:nrope largely originated inWest and Central Africa, though in thelate seventies imports from SoutheastAsia increased significantly."

The depletion of forests is reshapingtrade patterns in tropical forest productsas well as worsening some countries' bal-ance of payments. Several long-time ex-porters have markedly reduced theamount of hardwood logs sent out of thecountry and now focus more on process-ing wood to meet their domestic needs.Some traditional suppliers in WestAfrica and Southeast Asiaareas wheredeforestation hag reached critical pro-portionshave nearly eliminated theirexports of sawlogs and veneer logs."Ghana's 1981 raw log exports were only7 percent what they were ht 1964; Ni-geria's were only 1 percent. Export de-clines began later elsewhere but werealso dramatic: Thailand's log exports in1981 were only 8 percent and those ofthe Philippines 15 percutt or their peakamounts in recent years. While somecountries have increased their exports ofprocessed wood products and therebysustained the total value of their forestexports. others have not. Nigel ia's twen-tyfold decline in log exports between1970 and 1980, for example. wasmatched by a sixteettfold declttte in theexport value of all Its forest products."

Between mid-century. when exportsof tropical hardwoods began increasingrapidly. and the early seventies, a largeportion of tropical logs left the produc-ing countries in their unprocessed form.In 1973. the primary tropical wood pro-ducers exported nearly half their logsunprocessed; the notable exception wasLatin America. which processed nearly41 its logs and exported little of its forestproducts in raw form. Consequently. theunit value of forest product exports re-mained comparatively low. Value wasadded in thosedeveloping countries thatprocessed wood into products such asplywood, particle board, and veneersheets for domestic consumption or ex-port. FAO economist S.L. Pringle notedin the mid-seventies that the tropicalcountries were failiog to rapture about$3O -50 per cubic meter on logs used forsawnwood or veneer and $40-80 percubic meter on logs used for plywood. Ifthey hat: been able to process the 49 mil-lion cubic meters of unprocessed logsexported in 1973, tropical countriescould have gained perhaps an additional$2 billion hi revenne.92

Exports from Japan and the Philip-pines over the past decade are prime ex-amples of this situation. About three-quarters of the main industrial woodexports from the Philippines in 1973were unprocessed logs with a unit exportvalue of $39 per cubic meter. Panels had

101

06) Stare of the World-1984

a unit export value more titan triple thatof the logs but represented only 5 per-cent of exports. In contrast, Japanhis-torically a major importer of unproc-essed logs from the Philippinesearnedover $75 million in 1973 from exportingjust 165.000 cubic meters of wood-basedpanels. Thus it took close to two millioncubic meters of Philippine log exports tobring in as much revenue as the Japanesepanels. In response to dwindling forests,rising domestic demands, and compara-tively low unit export earnings for rawlogs, the Philippines has decreased ex-ports of all wood products, but espe-daily of unprocessed logs. Higher-valued wood-based panels now accountfor 32 percent of forest-product exportearnings, whereas in 1973 they repre-sented just 13 percent.

These fiscally appropriate responsesmay prevent remaining tropical forestsfrom following the route of other. nowover-exploited areas. Indonesia, whichstill has 80-100 million hectares of tropi-cal forest. (roughly half of which is virginforest), emerged as the leading exporterof tropical hardwoods in the mid-seven-ties and undoubtedly helped to fill thegap left by the Philippine cutbacks. (SeeFigure 5-1.) In 1980, over 80 percent ofIndonesia's timber exports were still inthe form of unprocessed logs.

Apparently realizing that it should getmore financial mileage from its vastareas of remaining forest. the Indone-sian Government is now strongly en-couraging domestic processing of wood.With the aim of completely eliminatilgraw log exports by the mid-eighties,strict export quotas were imposed in1980. George Ledec of the World Ranknotes that this measure was instituteddespite significant economic obstacles,including protective tariffs applied byimporting countries such as Japan toprocessed wood products but not to rawlogs. Ledec also notes that Indonesia'saction has piqued multination corpo-

MdhonCubit Mete =s

20

15-!,

10-

Indonesia

Source. FA()

Philippines

1964 1970 1976 1982

Figure 5-1. Sawlog sad Veneer Log Exports,Philippines and Indonesia, 1964.81

rations' interest in Papua New Guinea,where deforestation and logging havenot yet occurred on a large scale."

The picture painted is thus one ofshifting pressures within the tropical for-est resource base and of more active at-tempts by tropical countries to derivegreater value from remaining resources.Given that a raw wood supply of at least15-30 years is needed to justify invest-ment in local wooer processing facilities,countries with substantial areas of tropi-cal forests remainingand desiringgreater value from themhave an incen-tive to manage their forests on a moresustainable basis. Ironically, deforesta-tion's implications may in this sense helpreverse some of the forces that have per-petuated it.

LESSONS FROM RECENT

INITIATIVES

Fuelwood shortages, uncontrolled clear-ing of trees for agriculture, mining oftimber resources, and the increasing se-

1 02

Prottetiv Forests (87)

verity of deforestation's ecologicalconsequences are fundamentally chang-ing perceptions about the role of forestsin tropical development. Initiativesspawned by these new perceptions havein common a new %icy,- of forests notonly as complex systeins in their owrright but as natural systems inextricablylinked to the human sy stems that revolvearound them. Describing new forestryefforts in Honduras, Marco AntonioFlores Rodas.. an FAO official and for-mer Forestry Manager of the HonduranCorporation for Forestry Development,nmes It was intended that the distinc-tion between forest, industry and peas-ant should be forgotten since they areone and the same thing."s4 Putting for-estry on a sustainable footing in the de-veloping countries requires attackingthe common roots of deforestation'sdirect causespopulation growth,poverty, landlessness, and the absenceof viable options for people andgoy ernments. Both inspiring acrd sober-ing, recent initiatives are focusing alien,lion on new responses to a rarefy askedquestion: forestry for whom and forwhat?

India's western state of Gujarat iswidely recognized as haying that coun-try's most innovative and initially suc-cessful social forestry program. At itscore is a plantation effort under whichslate foresters encourage villages to es-tablish plantations on a portion of theircommunal land. Recent features addedto the program focus on individual for-estry initiatikes, supplementing thesomewhat faltering progress madethrough community forestry.ss Onesuch change includes assigning to land-less families 37.5 hectares of degradedforestland to be planted with seedlingsat the rate of 2.5 hectares per year for 15years. In return for a commitment of 40days of work per month, each family ispaid a fixed monthly sum of 250 rupeesand offered free housing material, some

fOrest produce, and 20 percent of the netprofit from the harvest in the fifteenthyear. With a stake in the profits, familiesthus have both an incentive to care forthe trees and a steady income until theyear of harvest. Another component ofGujarat's program furnishes farmerswith free seedlings to be grown on de-graded and marginal farmland. Eachyear these farmers receive 250 rupeesfor each hectare they tend, provided thatat least 70 percent of the trees survive.s6

Despite its successes, social forestry inGujarat and other areas of India has re-cently come under severe criticism. Par-ticular concern has been raised aboutpromoting the planting of eucalyptustrees. A study in the Kolar district of Kar-nataka State by the Indian Institute ofManagement found that social forestrywas not achieving its goals and in factin many ways was worsening the lot ofthe poor people it presumably was de-signed to benefit. lmroduction of euca-lyptus encouraged private landholdersto grow trees for sale in the markets,thus supplanting traditional communitydependencies and disrupting commu-nity development. Although increasingfuelwood supplies is a primary goal ofsocial forestry,. eucalyptus has thus farprovided little fuel for the villagers. Withthe trees worth 250-300 rupees per ton,about 80 percent of the eucalyptusgrown in Kolar was sold as raw materialfor the rayon industry in Harihar. Theauthors found that the plantations inKolar did not help meet rural people'sdesperate need for fuel and warned thatthe firewood crisis may well worsen de-spite the "impressive" growth of euca-lyptus plantations in the villages.s7

Planting eucalyptus on croplandmakes it more difficult for the poor toobtain food, income, and other basicnecessities beyond fuel. Although treeplanting programs ark ;mended for mar-ginal agricultural land, the area plantedto ragia staple millet in rural areas-

103

8S) Stair of the Woad-1984

&dialed b1 66 pet cent in the Kolar dis-trict between 1977 and 1981, as much ofthe area was converted to eucalyptusplantations. Ragi prices in the state dou-bled in the course of two years, partly aresult ofa crop failure in 1980-81 but nodoubt also a reflection of the reducedarea in production. Although growingeucalyptus rather titan food crops candouble or even quadruple a farmer's an-nual income, it deprives landless labor-ers of employment. The Indian Instituteauthors estimate that each hectareshifted from food crops to eucalyptus re-sults in a loss of 250 days of work peryear. Eucalyptus is also replacing nativetrees that better met some of the ruralpeople's basic needs: The loss of Hongetrees, which traditionally provided oilfor lighting, has made local people moredependent on expensive and unreliablesuppIies of kerosene." Even those whodispute these criticistns of social forestryagree that the present form of theseefforts threatens to widen the gap be-tween the rural rich and poor."

Social forestry as often practiced todate emerges from these assessments asvery much a double-edged sword. Be-nefits clearly do accrue, but to whom andat what social, economic, and envis on-mental costs? Are program objectivesbeing met if, rather than meeting ruralpeople's bask needs directly, success re-lies on benefits trickling down fromthose fortunate enough to derive incomefrom supplying eucalyptus wood to therayon industry? .These complex ques-tions demand serious attention not onlyin India, where forestry programs insome 100 districts are planned, but inother countries as well. One thing isdear: Measuring the success of social orcommunity forestry efforts merely by thenumber of seedlings planted, withoutconcern for what species is plantedwhere, by whom, and for whose benefit,is insufficient and inappropriate.

Another approach to reforestation,

known as agroforestry, integrates woodand crop production. 'these schemeshold particular promise for areas in Cen-tral America and the semiarid AfricanSahel where aditional farming systemshave begun to crumble under the pres-sure of rising populations. Attempts tosqueete more crops from marginal landshave resulted in shortened fallow peri-ods, declining soil fertility, and reducedcrop productivity; rising fuelwood de-mand has spread desertification.

Agroforestry projects in a number ofcountries are attempting to reversethese deteriorating conditions, in theKordofan region of Sudan, where deser-tification and firewood shortages are ex-tremely severe, efforts have focused onrestoring the traditional practice ofgrowing nitrogen-fixing acacia treesalong with food crops. Turi Hammer,designer of the Sudan program, attrib-utes the willing cooperation of villagerslargely to this emphasis on rebuildingtime-tested sustainable land-use prac-tices, as well as to their perception thatthe program would supply food andwater along with fuel. Overall, Hammerstates, "the fact that close to 1,000 farm-ers have actually planted seedlings to-gether with their agricultural crops andthat many more are in line to join nextyear's activities shows that the farmersthemselvessmall and large, men andwomenregard the restocking of thegum belt through agroforestry as oneimportant measure to help secure a safelivelihood M the area.""

Alleviating pervasive fuelwood short-ages in the tropical countries requiresnot only programs to increase wood sup-plies but also efforts to use existing sup-plies more efficiently, Open fires, whichwaste over 90 percent of the heat theygenerate, are still a primary means ofcooking. In Kelly% where the fuel crisisis particularly acute, it takes nine milliontons of wood to produce one milliontons of charcoal. Yet without more-

t04

hotel-tow Forests (89)

efficient stoves, tlus ( hatcoal bittlIS Withonly a 5-10 percent efficiency. Giventhat 70 percent of the charcoal is used incities while 90 percent of Kenya's peoplelive in rural areas, it is questionablewhether Kenya can afford to use its woodin this way, even though it does ease thetransport of fuel to urban areas.61

Although stoves are available that cancut fuel consumption in half, their intro-duction has met with limited success.Observers have found that rural peopleresist using these stoves because theyoften are not well suited to local socialand cultural practices. Researchers atthe Beijer institute in Sweden, followingextensive study of the fuel crisis in tropi-cal Africa, concluded that "efforts to im-prove stove design are essentially mis-guided in that the criteria for design isphysical efficiency rather than socil effi-ciency."61 As with social forestry pro-grams in general. working with the localpeople in the planning And design oftechnologies to improve their cookingand heating methods is essential.

In several countries where logging hascontributed to forest depletion. pro-grams have been introduced to protectforests from wasteful and unsound tim-ber practices. One ar,parently successfuleffort in the Philippines integrates localprocessing of pulpwood with an agro-forestry program aimed at stabilizing thelivelihoods of the shifting cultivatorslargely responsible for forest destruc-tion. The Paper industries Corporationof the Philippines (P1COP), a 30-year-old public corporation, was a pioneeramong tropical countries in developingdomestic wood processing facilities. By1971, PICOP had established pulpand newsprint mills, a container boardplant, a sawmill, two plywood mills, aveneer plant, and a blackboard plant.PICOP's integrated complex allows it touse nearly all the tree species and quali-ties of wood found on the 183.000 hec-tares of public land it manages wider

license from the Philippine Govern-ment."

PlCOP's innovative program encour-ages nearby small farmers to grow treeson their marginal farmland for sale aspulpwood ft)r the industry's mills. Thisprogram, funded in part by the WorldBank, offers loans to farmers throughthe Development Bank of the Philip-pines and helps participants to plant andcare for the seedlings. The tree grown isalbizia, a fast-growing legume especiallysuitable for manufacturing newsprint.Through PlCOP's extension services,farmers have also been taught ways toimprove their farming and livestockmethods. By March 1978, a total of3,400 farmers were growing roughlynine million seedlings on 16,600 hect-ares.61 John Spears of the World Bankcautions that cash-tree programs such asthis are suitable main! when a process-ing plant is located within a reasonabledistance. Transportation costs pre-vented small farmers outside a 100 -kilometer radius of the PICOP millfrom pat.ticipating. Nevertheless, similarschemes hold promise for other coun-tries, and tree-farming projects arebeing developed near other processingplants in the Philippines 6s

China and South Korea have beenwidely lauded for their success in refor-esting their countrysides to restore theenvironmental support functions oftheir degraded lands More countriesare now following suit. The World Bankis funding watershed protection effortsin India, Indonesia. Nepal. the Philip-pines. and Thailand. These projects in-volve not only soil conservation andreforestation projects but also measuresto improve irrigation. Rood control. andfarming and grazing practices so as tocreate more-sustainable land use sys-tems in these areas. An analysis of be-nefits accruing to farmers from a soilconservation and forestry program MThailand showed that increased crop

105

(90) State of the Wor Id-1984

yields and fuelwood and fodder produc-tion would give the project a rate of re-turn of 13 percentevidence of the realeconomic value of ecologic restora-tion.66

THE PROSPECTS FORSUSTAINABILITY

Sustaining the forest resource base in-volves defining the socially optimal mag-nitudes and mix of wooded landsold-growth natural forest, natural orartificially regenerated forest, plant?.dons, and woodlotsthat will bothallow demand for wood products to bemet without depleting the forest capitaland preserve the essential nonmarketvalues of the forest ecosystem. Changesnow taking place in the structure andcomposition of tropical forest resourcesresemble those that occurred in the temperate zone in past decades. Increasingdemands for wood and wood productshave diminished old growth naturalstocks, bringing demand and availablesupplies into closer range. This has fos-tered a gradual shift away from relianceon natural forests toward greater pro-duction and use of wood from higher-yielding plantations.67

The current rate of planting wouldhave to be increased more than 13times to reach the level needed tomeet year MO needs,

In most regions of the tropics thistransition has begun only recently. TheFAO assessment of tropical forests pro-jects a resource base in 1985 of about 2.9billion hectares. of which 40 percent willbe closed natural forest; 24 percent,

Table 5.6. Projected Tropical ForestResource Base, 1985

Forest Type Area

Closed Natural ForestOpen Woodlandst orest FallowShrubland

(million hectares)

1.163715435622

Total 2,935

SOURCE: United Nations Food and Agriculture Or-ganization, Troptcal Fornt &mows, Forestry Paper30 (Rome: 1982)

open woodlands; 15 percent, forest fal-low; and 21 percent, degraded shrub-land. (See Table 5-6.)

Plantations are expected to cover 17million hectares by 1985. only 1 percentof all natural forest and open wood-lands. Based on estimates of existingplantations and programs planned orunder way, FAO projects that 59 percentof these plantations will grow trees forindustrial wood usesprimarily saw-logs, veneer logs, and pulpwoodwhilethe rest will be nonindustrial plantationsgrowing trees to provide wood for fuelor charcoal, nonwood products such asfruits and gum arabic, or protection ofsoil and catchment areas. (See Table 5-7,) Industrial plantations are expected toincrease at 580.000 hectares per year be-tween 1981 and 1985. 15 percent morethat, during the preceding five years.Nonindustrial plantations arc projectedto grow by 519.000 hectares per year, a24 percent rise over the preceding fiveyears.60

At this rate of planting. the ratio oftropical areas being deforested to areasbeing planted with trees will be ten toone. Some of the deforested areas willsupport secondary growth; overall, how-ever. planting will fall far short of com-pensating for deforestation. More im-portant is the extent to which theprojected mix and productivity of forest

106

Table 54. EstablishmentWith

Protecting Forests

of Plantations in the Tropics, 1916-80,Projections for 1911145

Annual Area Planted

(91)

Total AreaPlantation 1976-80 1981-85 by 1985

(thousand hectares)Industrial Plantations 503 580 9.968

Fast-growing hardwoods 149 214 3,185Other hardwoods 127 100 2.734Softwoods 227 266 4.049

Nonindustrial Plantations 418 519 7,039Fast-growing hardwoods 286 385 5,211Other hardwoods 90 87 1.310Softwoods 42 47 518

sovat.t. Untied Nation Food and Agrtculture Orgatiutton. Tropical Forest Resources. Forestry PaperSO (Rome, PM).

resources could meet future world needson a sustainable basis. Here the pictureis sobering, particularly for fuelwood inthe developing world.

Given current planting rates. tropicalnonindustrial plantations will cover 14.8million hectares in the year 2000,slightly more than twice the area today.If the wood from all these plantationswere used for fuel, and if each hectareannually yielded 20 cubic meters, 296million cubic meters of fuelwood wouldbe available from plantations in the year2000. Extrapolating prevailing percapita consumption levels to the year2000. when the developing world's pop-ulation is projected to be 4.86 billion,yields a requirement of 2.19 billion cubicmeters of fuelwood. Thus fuelwoodplantations would meet only 14 percentof these needs. The current rate ofplanting would have to be increasedmore than 13 times to reach the levelneeded to meet year 2000 needs. More-over, since 112 million people lackedsufficient fuelwood as of 1980, per capitaconsumption figures are below whatthey would be if fuel needs were beingmet adequately. Indeed, FAO projectsthat 3 billion cubic meters of fuelwoodmight be needed for the developing

world in the year 2000. Meeting this tar-get would require an eighteenfold in-crease in current planting.69

Although no cause for complacency,the global picture for industrial woodappears bright next to these forebodingfigures for fuelwood. A team of expertsassembled by FAO from industries, uni-versities, and governments estimatedthat global resources in the year 2000could supply over 2.5 billion cubic me-ters of wood on a sustainable basis andthat demand under moderate growth as-sumptions should be about 2 billioncubic meters. However, the team's pro-jections pointed to large imbalances in'regional demand and supply. WesternEurope and japan are projected to havenet trade deficits in the year 2000 of 75and 118 million cubic meters, respec-tively, and collectively the industrialcountries (excluding the Soviet Unionand Eastern Europe) are expected toneed imports totaling 130 million cubicmeters. Moreover, higher rates of popu-lation and economic growth would in-crease demand worldwide, Under FAO'shigh-growth assumptions, demand in2000 would be about 2.6 billion cubicmeters, exceeding projected availablesupplies,"

107

(92) State of the World-1984

The FAO team assumed that woodfrom developing countries could fill intwothirds of the expected 130-millizat-cubic-meter gap in industrial countriesthrough less-selective cutting of existingstocks, logging of less accessible areas.and plantations. Based just on estimatesof forest area and productivity, the So-viet Union could comfortably supply theadditional 50 million cubic metersneeded to balance the global demand-supply equation. Of the Soviet Union'sestimated 785 million hectares of for-ests, only about half are considered ac-cessible for timber operations. Softwoodtaken from these exploitable forests isalready thought to he outpacing the sus-tainable harvest, yet hardwood removalsare only about one-fourth the estimatedsustainable yield of 250 million cubicmeters. Thus while balancing overallnumbers, the study team foresees strainson supplies of tropical logs, softwoodlogs, and pulpwood",

Clearly, the practical reality may notmatch the on-paper possibility of balanc-ing world wood needs with supplies inthis manner. Export decisions by the So-viet Union and developing countries un-doubtedly will be shaped by domesticgoats and policies that may not accordwith the needs of wood-short regions.And per capita consumption of woodproducts in the developing world hasrisen dramatically in recent years. (SeeTable 5-E.) The combination of thesetrends and Third World population increases will intensify pressures for do-mestic use of tropical wood. China wasassumed by the FAO team to be self-sufficient in both hardwoods and soft-woods over the long term. Yet log ex-ports to China from the Minted Statesjumped from 210,000 cubic meters in1980 to 1.28 million cubic meters ill1982a sixfold increase,72 Chinese im-port needs in the future will depend onpopulation growth, industrializationplans, and the success and scale of

Table 5.8. Per Capita Consumption ofWood Products in Developing Countries,

1970 and 1980

Product 1970 1980 Change

Fuelwoodand Char«sal

IndustrialWood'

Paper andPaper Board

(cubicmeters)

(percent)

445 .452 + 2

.090 .118 +31

.005 .008 +60'Industrial wood 1% the s11111 of industrial round.

wood. saw ;mood And sleepers. and wood.basedpanels.sot Rc. United Nations Food and Agriculture or-ganization. Repaint' Tables of Praduaton. Prude andCotisninpiran of Finest Product, NW Economic- Clas.,,and Regions Mom: 198'21

afforestation efforts, all presently opento speculation. Indeed, the team con-cluded that if world demand reaches theprojected high-growth level of 2.6 bil-lion cubic meters, the additional neededwood might come "at a considerably in-creased cost, from the tropical forests ofthe Amazon Basin and the less accessibleconiferous forests of Siberia and fromlower quality North American hard-woods. Additional quick-growing plan-tations in the tropics would also beneeded.'"

Although laced with uncertainties,these trends clearly portend rising pricesand greater pressure to log tropica: for-ests. Competition for increasingly scarcetropical logs between importing coun-tries and wood-processing industrieswithin the producing countries will alsoraise prices. Use of more species andgrades of wood from tropical forests, aswell as of mill residuals for pulpwood,can counterbalance some of these pres-sures. Yet with an exacerbating fuel-wood crisis in the develoring world andthe newly recognized possibility of de-clines in forest prerit,cmity in some key

108

Protecting Forests (91)

temperate regions from add depositin,sustaining an adequate global timbersupply will present some hard choices.

More plantations are clearly a key tomeeting future demands. The story ofplantations so far in tropical commies isone of unrealized potential. Eighty-tivepercent of the areas u alergoing refor-estation are planted with one of threetypes of trees: pities. eucalyptus, or teak.Many other species may prove more use-ful in meeting not only dem: ids forwood but also the varied needs of localpopulations. Initial experiments withsome little-known tropical legume spe-cies, for example, are showing greatpi °misc. The characteristics of manylegumes make them ideally suited to themultiple purpose of rerorestationefforts. They are natural yonecrs inplant succession, and thus a logicalchoice for reforesting degraded landsand controlling erosion. Many speciescan he seeded directly, avoiding the ex-pense and complications of distributionfrotn nurseries; with their ability to fixnitrogen, they require little or no fertili-zer, Their inherent hardiness suns themremarkably to degraded nutrient-poorsoil, and 2 variety of climates and envi-ronments. A recently puhlished manualdescrihing 90 different firewood speciesincludes 35 belonging to the legumefamily.74

Although clearly optimistic ahoutthese specks' potential, scientists whohave introduced and studied them invarious locations and conditions are cau-tious not to view them as a panacea,Monoculture plantations, especially ofintroduced spurges, are not without eco-logic risks, and the hardiness of some ofthese species raises the possibility oftheir becoming uncontrolled weeds. Aninformed verdict on the real potentialand consequences of these tropical treelegumes will not be in for perhaps five toten years. Yet results to date are promis-ing.

Lencaena. which has slidwn produc-iivities of 30-50 cubic meters per hect-are, is being planted on thousands ofII, dares in the Philippines, includinglarge areas of degraded grasslands.leticaena supplies fiher suited for paper-making and wood for pulping. as well asforage, fuel, and fertilizer. Acacia treeshave taken hold on barren spoil dumpsfrom tin tnitung in Malaysia and helpedto stabilize eroding hillsides in In-donesia. Foresters have planted over15,000 hectares of degraded land inMalaysia with another acacia variety thatappears to grow on quite acidic soils. Itshigh quality wood offers potential forsawed timber, furniture, veneer, fire-wood, and .'uircoal as well as pulp andpaper. Fuelwood plantations of callion-dra now cover some 200.000 hectares inJava, many planted by local villagers whooften intercrop these small firewoodtrees with fruit trees and vegetahles.75

Many other species look equallypromising. Collectively, they not onlyhold potential for helping to meet fueland industrial wood demands, but alsomay enhance the prospects for a sustain-ahle way of life for rural populations.Their beauty lies in their apparent abilityto hattle not only deforestation's conse-quencesboth economic and ecologicbut its causes as well. If even 10 pei-cent of the land now in forest fallow wereplanted with species yielding an averageof W cubic "meters per hectare, an addi-tional 870 'talon cubic meters could heavailable each year to help meet fuel-wood and other needs.

Plantations clearly cannot he the solesavior of tropical forests. Odd as it maysound, further exploitation of naturalforests themselves may he a key to theirsurvivalnot traditional exploitation fortimber. but exploitation and sustainahleuse of the multitude of other productsthis lich resource offers. Citing a host ofspecialty materials valuahl.: to industryincluding latex. gum, camphor, resins,

109

19.11 State of the World-1984

tannins. and dyesNorman Myers pic-tures the possibility of industrial centersusing as raw materials tropical forestproducts harvested on a sustainablebasis with little disturbance of the natu-ral forest." Ways to exploit tropical for-ests' economic potential while preserv-ing their essential ecologic functions aremany, though as yet they are little recog-nized or explored.

In most developing countries, the in-stitutions, financial capital. and socialmechanisms needed to chart a sustain-able course for forest resources are notyet available. International lending or-ganizations have a vital role to play notonly in helping define this course but inproviding the technical and financialmeans by which developing countriescan embark upon it. The World Bankand U.N. lending agencies are now plac-ing increased emphasis on communityforestry, on projects for ecologic resto-ration, and on forestry's integral role inrural development. Although none ofthe agricultural and rural developmentprojects funded by the World Bank be-tween 1969 and 1972 included a forestrycomponent, 17 of those between 1973and 1977 did. Over 60 percent of WorldBank loans for 1978-80 forestry projectswere geared toward environmental pro-tection and fuelwood production. FAO's1982-83 budget for forestry programswas 30 percent higher than the previousyear including a 67 percent increase inprojects for rural development.71

No infusion of dollars, however large,

can alter the present course of forest de-struction without the institutions and so-cial mechanisms to direct these dollarsto the problem's core. Recent effortsshow that forestry programs are boundto fail if they neglect the basic needs ofthe forest's human dependents. As M.A.Flores Rodas of FAO states, "Once weare all convinced that, in order for theforest to survive, its inhabitants mustsurvive first, we shall reach the pointwhere both can sure lye:Is

Greater emphasis on social forestry.reforestation, and forest preservationengender optimism. Yet the deforesta-tion dilemma still cries for more commit-ment, clarity, and vision. Reforestationeffons are less than a tenth of what theyneed to be to avert a worsening fuel-wood crisis. Dollar commitments forcreating and maintaining tropical forestreserves are woefully inadequate to en-sure that species and gene pools are pre-served for this and future generations.New institutional mechanisms areneeded to generate and wisely channelthe billions of dollars needed over thecoming decades to sustain the productsand nonmarket values of these forests. Itis neither plausible nor equitable to ex-pect the developing countries endowedwith this resource to shoulder the bur-den of its preservation unaided. Tropi-cal forests' intrinsic role in maintainingecologic integrity and biological and ge-netic divenity make them global assetswarranting a global commitment to theirpreservation.

10

6

Recycling MaterialsWilliam U Chandler

Wood, iron, and aluminum, the princi-pal materials used in a modern economy.will serve as basic building blocks of asustainable future. But their availabilityis threatened by the uncertain prospectsfor energy, a resource with painfully ob-vious constraints.' Simply maintainingcurrent levels of materials productionwill require prodigious quantities of en-ergy. World steel production alone con-sumes as much energy annually as SaudiArabia produces. To raise global percapita use of metals to U.S. leA eels wouldrequire the energy output of seven SaudiArab ias. or 40 percent of commercial en-ergy consumption. Many people still lackbasic material amenitiesmetal forwater pipes, wood for housingand theearth's population is still growing. Recy-cling, fortunately, can cut the energy re-quired in materials production by 50 to90 percent and thus help narrow thewidening inequity between the world'srich and poor.

Throwing away an aluminum beveragecontainer wastes as much energy as pour-ing out such a can half-filled with gaso-line; failing to recycle a weekday editionof the Washington Post orLos Angeles Timeswastes just about as much.2 Because pro-ducing and consuming energy to manu-

facture wood, aluminum, and steelproducts create severe environmentalproblems, recycling promotes environ-mental protection. And solid waste dis-posal, at $30-100 per ton, represents amajor budget item for many cities.' Resi-dents often react strongly against havingdumps located near their homes, creat-ing political roadblocks to waste dis-posal. The prospect of achieving a 40percent reduction in slid waste, as somecities have done, offers leaders a tangiblepolitical and economic opportunity.

Recycling thus saves energy and ex-pensive raw materials, protects the envi-ronment, and cuts waste disposal costs.Despite these advantages, only aboutone-quarter of the world's paper, alumi-num, or steel is recovered for reuse.Nevertheless, certain areas have maderemarkable progress. These cities,states, and countries have developedmarkets for the waste products they col-lect and have facilitated collection in avariety of ways. Many countries have in-vested in recycling equipment evenwhen locally available scrap has been in-sufficient; imports of waste paper, scrapiron, and aluminum scrap have thus con-tributed to recycling elsewhere. Theirinvestments have saved capital and en-

iii

(96) State of the World-1984

el to and have helped nations compete ininternational markets b) reducing debt,improving trade balances, and loweringthe cost of products manufactured forexport. A large inlet national trade in re-cyclable materials has developed, in fact.providing a powerful new tool that cantransform a wasteful world materials in-dustry into one that is sustainable.

Wood, aluminum, and iron take prior-ity in recycling because their productionrequires large quantities of energy andcauses major environmental problems.Also, their abundance should satisfy de-mand for base materials in the foresee-able future. Among resources, however,wood takes a special place: It is a fuel, abuilding material, the raw material forpaper. and a substitute for oil as a feed-stock for chemicals production. And it isrenewable. Sustaining the world's for-ests, already being depleted faster thanthey are being renewed, is therefore aspecial necessity. Yet progress in recy-cling paper has been slower than that ofaluminum, and the paper recycling in-dustry is much smaller than that of ironand steel.

Each material requires different recy-cling technologies, policies, and mar-kets. The constraints on recycling maydiffer from resource to resource, muchas trade barriers for iron scrap differfrom tax sttbsidies for timber harvesting.RCITIOVIng such obstacles may requireaction on planes as different as local zon-ing boards and international trade com-missions. Each resource, its potential forrecycling, and its special technical andpolitical circumstances tnust be consid-ered in turn.

THE VIRTUE OF NECESSITY

Recycling has been an environmentalgoal for a decade now, but only a few

112

areas of the world have registered gains.Voluntary recycling efforts have broughtsome success, but progress has comeabout mainly in response to necessity.Countries that have increased materialsrecycling have been motivated by threemain facto's: short supply of raw materi-als, high energy and capital costs forprocessing materials, and high environ-mental costs in materials production anddisposal. Countries that have not pro-gressed have generally masked necessitywith price controls and trade barriers.Those that have succeeded, however,have turned their handicaps to advan-tage, They have cut both environmentaland economic costs of materials use.

Recycling half the paper used inthe world today would meet almost75 percent of the deinimd for newpaper and would free 8 million hect-ares of forest from paper produc-don.

Metals recovery reduces pollution.Using coke in iron ore reduction pro-duces copious quantities of airborneparticulates, including carcinogenic sub-stances such as benzopyrene,4 Recyclingiron and steel reduces these particulateemissions by 11 kilograms per metricton of steel produced. It also cuts coaland iron ore mining wastes by 11,000kilograms per metric ton recycled.These solid wastes, unless handledproperly, can contaminate surface andgroundwaters with acid and toxic metaldrainage. Recycling aluminum reducesair emissions associated with its produc-tion by 95 percent. (See Table 6-1.) Dou-bling worldwide aluminum recoveryrates would eliminate over a million tonsof air pollutants, including toxic fluo-ride.s

Rerythag Almenals (97)

Table &I United States: Environmental Benefits of Recycling'

Environmental Benefit Paper Aluminum Iron & Steel

(percent)

Reduction of Energy Use 30-552 90-95 60-70Reduction of Spoil & Solid Waste 1302 100 95Reduction of Air Pollution 95 95 30

'Percent reduction m B i US, 10115 of waste, tons of particulates. etc., per ton of material recycled.*Refers to combustion of both commercial energy and wood reseducs. 5Morc than a 100 percent

reduction is possible because 1 3 pounds of waste paper 13 required to product one pound of recycledpaper. If all paper were recycled, the waste reduction, of course, would equal only 100 percent.motets; R.C. Ziegler co al . Impacts of iipgm and Rended Sieel and Alunuman (Washington. P.C.: U.S.En iroinitentai Protection Agent y. 1976), flask Pop Recovery (Paris Organisation for EconomicCooperation and Development. 1979)

Paper recycling helps preserve forests.Paper products use about 35 percent ofthe world's annual commercial woodharvest, a share that will probably ;rowto 50 percent by the year 2000.6 Al-though a sanguine attitude regardingthe state of the world's forests has a cer-tain following, there is little reason forcomplacency. As documented in Chap-ter 5, the world's tropical hardwood for-ests are expected to decline 10 percentby the end of the century. The softwoodforests of western Russia have long beenharvested at unsustainable rates, whilethose of central Europe are dying fromair pollution. The resulting decline inwood production will put additionalpressure on other forests.' The UnitedStates, producer of one-third of theworld's commercial forest products,would be expected to take up much ofthis slack. But the harvest of mature soft-wood forests in the United States hasexceeded replacement for severaldecades. Industry - owned forests, in fact,have been cut so heavily that maturetrees have heen depleted at an annualrate of I to 2 percent, apparently sincethe early fifties.*

Forests in the United States may notbe as ample as many imagine, however,anti may require additional protection.U.S. officials define a forest as an area assmall as one acre that is 20 percent coy-

ered by trees. Mature softwood trees areidentified as those over nine inches indiameter, though this describes a veryyoung forest. Intensively managedwoodlands will not retain the species di-versity of natural forests and will not beas resilient against disease and pollution.Advocates of more intensive harvestingin the United States point out that"growing stock" has been cut at rates farbelow replacement, but they ignore thefact that, as the Wall Street pumar put it,"these forests are neither deep, nordark, nor lovely."9 Much of what iscalled forest can neither satisfy humanaesthetic needs nor produce commercialtimber.

Paper recycling can help satisfy addi-tional paper needs for years to come.Only 25 percent of the world's paper isnow recycled, though no technical or eco-nomic reasons prevent a doubling ofthis figure by the end of the century.Recycling half the paper used in theworld today would meet almost 75 per-cent of the demand for new paper andwould free 8 million hectares (20 mil-lion acres) of forest from paper produc-tion, an area equal to about 5 percentof Europe's woodlands. But projectionsof the future use of the waste paper re-source are far less optimistic. FranklinAssociates, a consulting firm specializ-ing in paper recycling, projects that recy-

113

(98) State of the World-1984

cled paper will supply only 28 percent ofworld paper production in the year2000.10

Less well known are the economic be-nefits of materials recy ling. Producingpaper, aluminum, and iron and steelfrom secondary instead of virgin materi-als typically halves investment costsand, though varying with the productand the country, can cut total costs sig-nificantly. Because energy costs are alsolower, recycled paper can compete fa-vorably in many markets, depending onthe cost of collecting the paper. Thetotal production costs for producing alu-minunr and iron and steel from scrap in-stead of ore can be 10 to SO percentlower. Debt-ridden developing coun-tries and their lenders could benefitfrom investing in recycling rather thanmaterials production from virgin oresand fibers.11

Unfortunately, many nationsindus-trial as well as developingcontinue tomask the growing necessity of capturingrecycling's benefits. They subsidize en-ergy use with price controls, productiontax incentives, and the uncontrolled en-vironmental cost of producing and usingenergy in materials processing. The fullcost of energy-intensive materials is notaccurately represented in prices, and theincentive to reduce these posts is conse-quently diminished. The true cost of en-ergy includes damage to forests fromacid rain, to human health from pollu-tion. to human and aquatic populationsdisplaced by hydroelectric projects, andso on. Solid-waste disposal costs usuallyare paid in general taxes, not by in-dividuals who create waste, leaving noincentive to reduce costs. And exportbarriers have been erected specifically toreduce the price of metal scrap, a mea-sure that reduces the incentive to collectscrap and makes it less available as a sub-stitute for primary materials. Countriesthat lead in recycling have removedmost, if not all, of these masks.

114

WASTE PAPER

World waste paper consumption has in-creased 140 percent since 1965. Paperconsumption has doubled over the sameperiod, however, so the share of paperrecycled has changed only slightly, from20 percent in 1965 to 24 percent in1982. Despite this poor record, certaincountries have achieved much higherrates of paper recycling than others. {SeeTable 6-2.) Moreover, much of thisprogress has been made only in the lastten years. {See Table 64.)

Japan, the Netherlands, Mexico,South Korea, and Portugal lead in wastepaper recovery or use. japan in 1980 col-lected almost half the paper used in thecountry. The Netherlands, which has

Table 6-2. Paper Use and Waste PaperRecycling, Selected Countries, 1978-80

Annual PaperConsumption Recovery

Country Per Capita Ratel

MexicoJapanNetherlandsSpainSouth Korea

HungaryWest GermanySwedenItaly

'Brazil

AustraliaUnited StatesCanadaPhilippinesNigeria

(pounds)

n.a.32634715687

13234647720564

295580417

227

(percent)

5045434038

3735342929

282618

162

World Estimate 80 241Waste paper collected as a percent of paper

consumption. three ear average. 197840.sointcr.: United Nations Food and Agriculture Or-gani/ation, Advisory Committee on Pulp andPaper. "Waste Paper Data 197840." Rome, 1981.

Recycling Materials

Table 6.5. Waste Paper Recovery, Selected Countries, 1960-80'

(99)

Country 1960 1965 1970 1974' 1980

(percent)

Australia n.a 16 n.a. 23 28Austria 22 25 30 30 33Canada 16 15 19 18 19

Denmark 21 13 18 28 27France 27 27 28 31 30

West Germany 27 27 30 32 35Italy 15 17 21 28 30

JapanNetherlands

u.134

3734

3940

3946

4744

Nnrway 16 20 17 21 22

Spain 25 28 28 32 38Sweden 26 21 22 28 33Switzerland 33 33 31 40 35United Kingdom 28 29 29 28 34United States n a. 22 21 242 27

Wnrld Estimate n.a. 20 21 24 25'Waste paper collected as a percent of paper consumption. ?Data for 1975 unavailable. except for

the United States.sources: 1960-74 data from Organisation for Economic Co-operation and Development. flask Popo&rover) (Paris. 1979). 1980 data from United Nations Food and Agriculture Organisation. AdvisoryCommittee on Pulp and Paper. "Waste Paper Data 1978-807 Rome. 198 t.

been a leader in paper recycling fordecades, recovered 44 percent of itspaper in 1980.12 South Korea, Portugal.and Mexico doubly contribute to wastepaper recovery: They have high recoveryrates and they import waste paper.

Why do some countries perform bet-ter than others? Their admirable per-formance has been predictably pro-moted by necessity. These "fiber-poor"countries, without substantial forestsavailable for pulpwood harvesting, havebeen pressed by price and scarcity toconserve waste paper.. This may bepartly a matter of choice for the Japa-nese, since they have forests on theirnorthern islands that they do not heavilyexploit. South Korea has made greatstrides in reforestation, but still placesheavy demand on its forests, especiallyfor firewood, I s

Success in Japan and the Netherlands

has been promoted by twin necessities.In addition to being "fiber poor," bothare crowded, land-poor countries withpopulations strongly opposed to wastedumps. These factors together havedriven up both the economic and the po-litical costs of u 'sting paper. Importingfinished paper was expensive, and theJapanese passionately opposed dumpsbeing located near their homes, makingit politically costly for leaders to overrideresidents' protests. The Dutch similarlyopposed landfill disposal of municipalwaste. Since 20 to 40 percent of Japa-nese and Dutch municipal solid waste ispaper, recycling ameliorates waste dis-posal proble ms. 14

Japan's efforts in recycling have his-torical roots but began in earnest in themid-sixties. Now about 10 percent ofJapan's total municipal waste is recycled,and efforts to increase this proportion

115

(too) State of the Wm 1d-1984

continue." Collet non of WdS(C materialsis done in surprisingly diverse ways, sug-gesting that systems can be made towork in any number of circumstances aslong as collected waste can be sold for areasonable price.

One of the first programs in Japan re-sulted from the efforts of a private en-trepreneur who in 1960 persuaded thegovernment of Ueda City to pay hima portion of the "avoided costs'' oflandfilling the materials that his firm re-cycled. The city has found it preferableto pay a small recycling incentive than topay a larger amount for waste disposal.The plan requires residents to separaterefuse into combustible and noncom-bustible material. Glass is separated byhand at the dump and ferrous metalremoved by magnet.16

Elsewhere in Japan, Hiroshima hasachieved stunning success: Disposal ofraw refuse has been reduced by 40percent since 1976. Student clubs, par-ent-teacher organizations, and othernonprofit groups that organize sourceseparation programs and the delivery ofwaste materials are paid at or above mar-ket rates, with a subsidy made possibleby savings from avoided landfill fees. InFuchi City. a suburb of Tokyo, the localgovernment purchased recycling equip-ment for the use of a private firm Thefirm must turn over to the city much ofthe revenue earned from sales of recycla-ble materials, but is permitted to keep 20percent of any revenues above the costsof collection and operation of the facil-ity. In a variation of this approach, theShiki district of Tokyo made the initialinvestment in equipment, but lets a com-pany earn all its revenues from the salesof recyclables."

"We have to change [wasteful] culturefrom the very roots," asserts MuncoMatsumoto, an official in Machida, "thegarbage capital of Japan." Machidaboasts that its new recycling program ofsource separation and computerized

116

processing recycles 90 percent of thecity's garbage." Progress such as thisflows from the legendary discipline ofthe Japanese. their proclivity for effi-ciency, and their willingness to cooper-ate and solve problems. The grass-rootsinformation system provided by citizensworks well, apparently as a result of theincentives provided to groups. The Japa-nese make it easy to participate and diffi-cult not to participate in paper recycling.

The Dutch have taken a different,though equally successful, approach towaste paper collection. As in Japan, ne-cessity motivated national and local gov-ernments to encourage recycling: Bothfiber resources and land for waste dis-posal have been scarce. The Netherlandshas historically achieved the best paperrecycling record in the world, using afew key policies to make the marketplacework better. For example, the govern-ment established the world's first wasteexchange, a free brokerage service tomatch buyers and sellers of waste. Thegovernment has also attempted to stabil-ize the typical boom-and-bust cyclesin recyclables by establishing "bufferstocks."

The recycling industry is particularlyvulnerable to wild cyclical swings in themarket, and the recent recession hasbeen the worst since the Great Depres-sion. Buffer stocks enable collectors ofwaste paper in the Netherlands to sell tothe government-established fund whenprices drop below a predeterminedlevel. The stock is sold when prices goup again, and the fund is thereby replen-ished.19 Some economists say this iscostly and sometimes counterproduc-tive. It is difficult to match its operationwith the needs of the market and thus toavoid undesired market distortions. Yetthe approach has been used in bothJapan and the Netherlands, the two lead-ing nations in paper recycling, and maymerit further consideration elsewhere."

The Netherlands also strongly pro-

Recycling Alalenals (ban

motes source separation. though differ-ently from japan. which has relied moreon awareness, information. incentives.and armies of nonprofit organizations.The Dutch simply enacted a law requir-ing source separation in all municipali-ties that have contracted for collection ofwaste paper. Their success reinforcesthe point that any number of policiesma) be applied to effect recycling once asociety makes it a priority.

Mandatory source separation has re-cently been applied with success in theUnited States. Islip, New York. was suedby the state to halt landfilling, partly be-cause its dump was contaminating un-derground water and releasing yin)lchloride into the air. A court settlementrequired the city to initiate recycling.Residents may now be fined up to $250for noncompliance. No major enforce-ment actions have been needed vet.however. because the 50 percent compli-ance rate has exceeded the city's capabil-ity to handle recyclables. The collectionprogram has succeeded without costlyinvestments in sophisticated engineer-ing devices. Residents simply place re-cyclables in containers. putting glass andcans on top and paper underneath. Thetits sorts ferrous material with magnetsand the rest by hand, as in Ueda City,japan.21

"Markets first, collections second"should be the philosophy of recyclers,according to Ronald Rosenson of theNational Association of Recycling In-dustries in the United States. That is,the first priority in materials recyclingpolicy should be to establish demand forrecyclable products. If markets are es-tablished. collection will follow. To en-courage market development. the Scan-dinavian countries have created a

cooperative waste ext bane: Sweden. infact, helps industries with hazardouswastes find buyers who can put the mate-rial to productive use. 'These exchangesare based on the principle that one firm's

waste may be another's raw material. AWest German waste exchange foundedin 1974 has brokered over 20.000 offersand requests for recyclable materials andhas expanded into Austria, Switzerland,northern Italy, and France. But ,t., theexperience in the most successful coun-tries suggests. simultaneously establish-Mg markets and encouraging collectionwith various strong measures is impor-tanoz

Machida (japan) boasts that its newrecycling program of source sepa-ration and computerized process-ing recycles 90 percent of the city'sgarbage.

Necessity is the mother of collection,and uneven distribution of the world'sforest resources provides some nationswith local abundance despite globalscarcity, thereby lessening their pressureto recycle. But just as wasting gasoline inan oil-rich country carries an opportu-nity cost in lost export sales, so doeswaste of recyclable paper. If properlypromoted, the new and growing interna-tional market for waste paper could pro-vide a strong incentive to all countries.International waite paper trade hasgrown from almost nothing in the earlyseventies to about 10 percent of all wastepaper collected, or 2-3 percent of allpaper used in the world. The value ofthis trade totals some $600 million. de-pending upon volatile market prices.23

Mexico now produces half its paperfrom waste paper. In South Korea, im-ported waste provides 40 percent of thefiber used in paper production. Almosthalf of Italy's paper production also de-pends on waste, a significant portion ofwhich is imported. Canada imports halfthe wage paper it uses.24 This, tinfortu-

117

(to2) Stair of the WorldI984

!lately, is a consequence of the low col-lection rate within its own borders. Mostother importers have high domesticrates of waste paper collection. The highpercentages achieved in japan, the Neth-erlands, South Korea, and Mexico are allthe more remarkable considering thatmuch of the paper they use is exportedas packaging for manufactured goods.

The United States now dominates theinternational waste paper trade, account-ing for 85 percent of net sales. The sig-nificant expansion of trade between thisleader and Mexico, South Korea, andjapan during the seventies can serve as amodel for development of waste papertrade elsewhere. China, India, the Philip-pines, and Thailand could all becomelarge markets for recyclable paper."

Bin obstacles to trade could effectivelyblock such development. Though tradein waste paper has so far met with fewserious constraints, several factors havekept it below its potential. South Korea,for example, imposes a 10 percent im-port fee on waste paper. Because theUnited States is the main source andshipping rates are extremely favorableon this route. the tariff has not deterredpaper exporters. Under less favorabletransportation terms, however, tariffsand constraints on licensing importswould hinder recycling. Transportation,in fact, has been a serious impediment.Waste paper trade between the UnitedStates and Venezuela has been crippledby high rates, and inadequate rail facili-ties have hampered trade between theUnited States and Mexico. Another sig-nificant impediment has been unstablecurrency exchange rates. High values forthe U.S. dollar have reduced the coun-try's exports of waste paper.26

In addition to encouraging the expan-sion of international trade in this re-source, paper recycling can be promotedby creating or widening its cost advan-tages over paper made from virgin pulp.One advantage could be provided by in-creasing the price of virgin wood pulp to

reflect its true economic value. In na-tions where mature softwood forests areharvested faster than they are replaced,reducing the rate of harvest would putthe price of pulp closer to its long-termeconomic value. Forests would thus beafforded greater protection and wastepaper recycling would be encouraged.Paper and wood prices need not increaseas long as additional quantities of wastepaper are recovered and recycled.

The U.S. Government could take amajor step in this direction, since it ownshalf the softwood forests in the country.The U.S. Forest Service directly affectsthe price of pulp by leasing large areas ofnational forests each year regardless ofmarket demand. The suspension ormodification of this practice, coupledwith a setting aside of more publiclyowned forests for wilderness and park-land, would reduce the environmentalsubsidy of the use of virgin pulp and in-crease the relative attractiveness of wastepaper. The United States may also find itparticularly advantageous to acquire andprotect forests in the Southeast, wherewood harvesting is growing rapidly.

The price of waste paper can be stabil-ized by increasing demand for it and byexpanding its collection. Higher, morestable prices would provide an incentivefor commercial collection. Local zoningordinances to reduce landfill disposal ofpaper wastes, along with broader re-gional or national laws requiring sourceseparation and mandatory collection ofwaste paper, will increase supplies andthus serve to prevent drastic price in-creases. Indeed, the greater problemwill be to maintain demand for wastepaper, International markets will be es-sential for this purpose.

Waste paper will not be used unlessthere is the means to use k, and this im-plies that a marked change is needed ininvestment strategies in the papennalt-ing process. Following World War II,most Canadian and U,S. papermakersbuilt mills to exploit virgin pulp. A dlr.

118

Recycling .11atenals (103)

ferent type of mill is imputed to producepaper from waste. Private companies willbe induced to build recycling millsmainly by policies that increase the pricedifference between virgin pulp andwaste paper.

In developing confines, however.using cheap waste paperdomestic Orimportedrather than imported pulp orfinished paper products has alreadyproved economically amain% e. Interna-tional development agencies and finan-cial Mstittnions have begun to recognisethe cost-cutting potential of tin estmentin waste paper recycling in the ThirdWorld. The World Bank contributed al.most $1 million in 1982 to improve theefficiency with which Egypt's outcastsand garbage pickers. the Zebaleen. col-lect Cairo's wastes. The organization hasalso supported a multimillion- dollarproject in Egypt that will recycle papei .27Such investments in developing coun-tries can lead to higher rates of wastepaper collection by creating a ready mar-ket.

Government procurement of recycledpaper stitnulates recycling. By law, theU.S. Gov eminent must purchase papermade lion' recycled fibers, bin theCarter and Reagan administrations haveignored this requiremem The state gov-ernment of Maryland, however, haseffectii ely cotnplied with a similar law:Twenty -five percent of the state's paperis now recycled stoc k.29 The Organisa-tion for Economic Co-operation and De-velopment also encourages procure-ment of recy sled paper for its own use aswell as for that of its 24 member nations.

The use of waste paper as a fuel in theUnited States has unfortunately cratedan obstacle to increased recycling. which

'j.Rodney Edwards of the American

Paper Institute calls "the worst threat topaper recycling." this threat is "flowcontrol." or government monopoly ofthe flow of waste materials. 'lite opposi-tion to and cost of landfmlling has drawnmunicipal gm ernments to the use of re.

source rewi et y systems. which burn re-fuse to produte energy. But sotne citieshave gone beyond using refuse and wantto burn paper now being recycled.Akron. Ohio, for example. has built aresource recovery plant and has foughtto control all waste products in the city.The plant's creditors successfully pres-sured the city to ensure chat all burnablewaste would flow to the facility in orderto increase the revenues generated by itsenergy sales. This meant that would-berecyclers collecting old newspapers. cut-tings from envelope manufacturers, orcorrugated containers from supermar-kets wild be forced to deliver thesematerials to the city dump to beburned Y9 As a fuel, waste paper is worthabout $20 per ton. while recyclablepaper has a value of $40-60 per ton ormore.

The Japanese. the Dutch, and othersalso widely use incineration and energyre« :ery, but only after recyclable wastepaper has been collected. These facili-ties can be sized in advance to accountfor paper removed for recycling. if theyare not, however, cities will have a pow-erful incentiv e to disc urage recycling.Many U.S. facilities were planned in theenergy crisis atmosphere of the seven-ties. But as David Brower. founder ofFriends of the Earth, said in oppositionto a resource recovery plant in his hometown, they may. be "a good idea whosetime has passed." 90 Some U.S. advocatesof recycling call for a federal law to pro-tect recyclers from monopoly control ofnutnicipalities' wastes. Since the UnitedStates has 34 energy recovery facilities inoperation, 20 nearing completion. andmany others under consideration incommunities facing shortages of landfillspace, millions of tons of recyclablewaste paper could soon be "wasted" inmunicipal incinerators.

Another government constraint on re-cycling stems limn the control of energyprices. The United States, for example.controls the price of natural gas. which

119

(1041 Sink of the World-1984

ranks second only to waste wood as afuel for the U.S. paper industry. As aresult. the industry uses more naturalgas and less waste wood to producepaper. Paper prices do not reflect thetrue energy costs of production, and thisin turtt lowers the rate of paper recyclingby decreasing the relative value of wastepaper. Because the United States pro-duces one-third of the world's paper, thegovernment's policy on natural gasprices in effect reduces waste paper de-mand throughout the world."

RECOVERING ALUMINUM

Substituting aluminum for heavy steel inautomobiles saves gasoline. Substitutingit for glass or for steel packaging savesenergy in trahsportation and may alloweasier, more efficient recycling. Yet pri-mary production, from bauxite, requires20 times as much electricity as using aluminum scrap as a metallic feedstock.Bauxite and coal must be strip-mined,and rivers are often dammed to generatehydroelectric power for smelting. Dis-carded aluminum containers spoil theenvironment. Because these problemsare serious, and because aluminum willplay an important role in any industrialsociety. aluminuin recycling is essential.

The world is far from achieving thetechnical potential for aluminum recy-cling. Although some analysts estimatethat 80percent of aluminum can be recy-cled, less than 30 percent of that pro-duced in 1981 came from scrap. Half therecycled aluminum came from industrialwastesscrap produced in the smeltingor cutting and fabrication of finishedproducts.

The low worldwide rate of aluminumrecycling is caused in part by rapidgrowth in the production of durableconsumer items such as appliances.

These products last many years and sodo not soon yield their metal to recy-cling. Purchases of washing machines,refrigerators, and automobiles in Brazil,for example. grew at an annual rate of 24percent in the early seventies.st Suchcountries, moving from low to high percapita rates of aluminum consumptionor experiencing high rates of populationgrowth, can expect somewhat less alumi-num to be available for recovery. Butmany countriessuch as Australia, Can-ada, Norway. and the United Stateshave had high per capita rates of alumi-num consumption for years yet recyclerelatively small amounts. (See Table 6-4.) Low recycling rates in these countries

Table 6.4. Aluminum Use and Recycling,Selected Countries, 1981

AluminumConsumption Recovery

Country Per Capita Rates

NetherlandsItalyWest GermanyUnited StatesUnited Kingdom

FranceJapanSwitzerlandNorwaySweden

AustraliaCanadaAustriaBrazilMexicoSoviet Union

(pounds) (percent)21 4227 41

45 3356 3220 28

26 2742 2534 2142 2034 19

41 16

36 16

27 15

5 13

7 10n.a. 10

World Estimate 7 28

'Aluminum collected as a percent of cunsurnplion.SOURCES: The Aluminum Associatiun. Inc...4/ums.atm Staksistal limey for 1981 (Washington. D.C,:1982); U.S. Bureau ur Mines. Antral' Parboolt1981 (Washington. D.C.: 1982).

120

Recycling Motenals ( l05)

may be due to histoncally low energyprices.

Since energy accounts for 20 percentof the cost of producing aluminum fromvirgin ore, the progress made in recy-cling during the seventies can be ex-plained in part by energy pre( e increases.(See Figure 6-1.) Great strides weremade in the United States, illustratingthat modern society can adapt to in-creasing scarcity without sacrificing liv-ing standards. U.S. aluminum recyclinghas reduced hod: environmental pollu-tion and the need to construct costly newpower facilities, thus freeing scarce capi-tal for use elsewhere in the economy.

Canadajapan. the Soviet Union, theUnited States. and West Germany pro-duce 60 percent of the world's alutni-num. Australia, China. France. Italy,Norway. Spain. and the United Kingdombring the total to over 75 percent. Italyproduces half its aluntinum from scrap.while West Germany and the UnitedStates produce one-third of theirs fromrecycled aluminum. Italy's performanceis particularly impressive because its percapita consumption has long averagedless than half that in the United Statesand 60 percent that in West Germany.33

Norway is the world's sixth largest alu-minum producer and the fourth highestper capita consumer. The country isoften cited as an CURIO(' of ctiviron-

Percent50 I

Sources: Resources forthe Future; World:much

25-............................y..--1

1955 1965 1973 1985

Figure 6-1. World Aluminum Scrap Use,1955.81

mental sensitivity. yet it directly recyclesonly 4 percent of the aluminum it con-sumes and exports large quantities ofscrap, which brings the total to 20 per-cent. Much of Norway's scrap finds itsway either directly or indirectly to Italy,another sign of the importance of inter-national trade in recyclables.

11w Soviet Union. the world's secondlargest aluminum producer, altogetherrecycled and exported only 10 percentas much aluminum as it consumed in1979 or 1980. This low level may be at-tributed to the complicated and highlycentralized control of materials produc-tion and allocation and to energy pricedistortions similar to those caused byU.S. price controls during the seventies.

These aluminum recovery rates canonly provide a relative index of how wella nation has perfornted. The figures in-clude scrap from fabricating mills, whichundoubtedly overstates progress in eachmajor producing country. Nevertheless,the dramatic differences. especially be-tween countries with high tales of pro-duction and consumption, can be in-structive.

Just tett years ago the United Statesranked low in recycling among theworld's major aluminum producers.(See Table 6-5.) Subsidized hydroelec-tric power and cheap coal kept electricityprices low. But coal price increases andcost overruns at nuclear power plants inthe aluminum-producing TennesseeValley and Pacific Northwest greatly in-creased the cost of power and, thus, ofprimary aluminum.34 These rising en-ergy costs had a dramatic effect in thisfield: Recycling grew from 17 percent to32 percent in ten years 35 U.S scrap con-sumption jumped 17.7 percent in 1981.The most dramatic change came in alu-minum cans. Only 15 percent of alumi-num cans were recycled in the UnitedStates in 1972; by 1981, over half wererecyck i.35 The United States recycledas much aluminum-can scrap in 1981 as

?

( 106) State of the World-1984

Table 6.5. Aluminum Recycling, Selected Countries, 1954-811

Country 1954 1960 1965 1970 1975 1981

(percent)

Fiance 21 19 17 20 03 27Wot German. 45 39 39 34 30 33Italy 27 29 33 37 41 41

Japan 19 26 21) 28 15 25United Kingdom 30 30 36 35 30 28United Slates 18 16 17 17 26 32

World ES totnatc 19 16 17 17 21 28ri hese 4oientrees represent 5( percent of %odd alunitnum production Rec)tleng rates represent

secondary wow, including strap aluminum consun.ed to both prmar) and secondary production.and net scrap consumptionsounces Data through 1970 from Leonard I., Fischman. World 3bsseml Trends and S Stipp() Problems(Washington. . Resources 'Or the Future. 1980). 1975-81 data lrom Alummum Siassaseal Reviewfor 1981 (Washington. M(.: The Aluminum Association, Inc. 1982)

the entire continent of Africa producedin both primary and secondary smelters.This also means, of course, that theUnited States threw away more recycla-ble aluminum in the form of beveragecans than Africa produced.3'

Norway's poor recycling record isprobably due to its abundance of inex-pensive hydroelectric power. Althoughthe long-term migration of energy-intensive Industrie., to energy-rich coun-tries such as Ni,cway may be a positivestep toward a sustainable society, in thecurrent era of unattained recycling po-tential it presents a hidden pitfall.38 Sub-sidies for energy usewhether theycome in the form of energy price regula-tions, government and developmentbank financing of hydroelectric facilities,or environmental degradation fromflooding, species extinction, and fuelcombustionunnecessarily waste re.sources.

The largely untapped potential of alu-minum recycling suggests that many en-ergy projects planned around additionalprimary aluminum production are un-necessary. Ten years of environmentalopposition to hydroelectric develop-ment in Norway has restricted expansionof primary aluminum production

there." Similarly, opposition halted adam designed to produce power for alu-minum smelting in Tasmania." Theseactions may increase the availability ofaffordable aluminum since they willforce a more economical use of re-sources.

Only 15 percent of aluminum canswere recycled in the United Statesin 1972; by 1981, over half were re-cycled.

Desp;:e high energy costs, Japan recy-cles only about 25 percent of the alumi-num it consumes. But per capita alumi-num consumption was low in Japan untilthe last decade. when rates climbedsharply. Much of Japan's "consump-tion," in fact, is shipped out of the coun-try in manufactured products such as au-tomobiles. The Japanese mainly usesteel cans and glass bottles for bever-ages, and so less aluminum scrap is avail-able than in the United States. YetJapan's primary aluminum industry hasseriously lost its ability to compete.

.122 Insamfs

Retycling Mattrutis (107)

(Italy's industry is in a similar position. Ithas tottered on the brink of collapse forseveral years, and its secondary industrymay be the only healthy segment thatremains.") Japan generates electricitywith oil, so power there now costs morethan in most countries. Japanese pri-mary aluminum production,, as a result.has dropped by about 25 percent us erthe last ten years. and the industry'slosses in 1982 totaled over $500 million.Less than 20 percent of the industry'spritnary aluminum production capacity.in fact, is deemed competitive.'"

In 1981, the Japanese actually pro-duced more aluminunt from secondarymetal than from primary sources. One-quarter of the scrap processed was im-ported from the United States: bringingback parts ofI'4,yotas and Datsuns. as itwere. In the meantime. Japan has im-posed tariffs on imported aluntinutningot and has pursued investment in pri-mary aluminum production in sevencountries. Japan's share in these invest-ments assures Japanese companies asntuch pritnary aluminum as the countryused in 1982 (872,000 tons).45

As with waste paper, internationaltrade brings a new and dynamic force tothe recovery of scrap alminum. Scrapmoving across national boundaries in1980 totaled 820.000 tons, representingmore than 5 percent of world aluminumproduction. At 369 per pound, the valueof internationally traded aluminumscrap amounted to almost $600 millionin 1980.44

Three leading consumers of recycledalueninumltaly. Japan, and West Ger-manyeach import large quantities ofaluminum scrap. Japan imported asmuch in 1981 as it used ten years earlier.With primary production declining as aresult of oil price increases, secondaryproduction in Japan increased 138 per-cent over the last decade, with as muchas ..`0 percent of the increase made possi-ble by scrap imports. Twenty percent of

the total aluminum production of bothWest Germany and Italy in 1980 can beattributed to scrap imports.45

In 1981, the Japanese producedmore aluminum from secondarymetal than from primary sources.

Yet European scrap smelters pose athreat to the free trade of aluminum.Seeking lower scrap prices, their ownersargue for increased trade barriers to re-strict scrap exports from their countries.A trade publication of the secondarysmelter industry repons that "EEC!European Economic Community) sec-ondary smelters are . . endeavoring toensure that the export of high value andettergy-rich raw material is restricted bythe re-introduction of export quotas."These quotas were removed by EECCountries in 1981 and replaced with aless restrictive export licensing system,after which exports of aluminum dou-bled.46 The importance of trade to thegrowth of recycling is clear. The "mar-kets first, collections second" strategywill be defeated by effons to suppressaluminum scrap prices. Similar efforts tosuppress iron and steel scrap prices havehistorically plagued recycling.

The importance of recycling alumi-num cans is also clear., Fully one-quarterof all U.S. aluminum production goesinto packaging, half of which is beveragecontainers. Mexicans used about 6.5pounds of aluminum per capita for alluses, while Americans used 6.7 poundsper capita for beverage containersalone." Although packaging can be animportant means of protecting food andother products, unless it is recycled suchconsumption would not seem to be sus-tamable.

The private sector has made com-mendable progress M collecting alumi-

123

( io8) State of the World-1984

noun cans or recycling. One of the mostexciting innovations in recycling is the"reverse vending machine," a machinethat accepts aluminum cans (rejectingferrous cans, glass. or other unwantedobjects), weighs the aluminum depos-ited, and dispenses money or coupons inpayntent. One machine in North Dakotareclaimed 109 tons of cans in one year,and 20 reverse vending machines inDenver, Colorado, paid out over Si mil-lion in an 18 -month period. Swedenplans to build and install an estimated10,000 reverse vending machines as partof an effort to recover 75 percent of thealuminum cans used in the country. Thiswould save 10,000 tons of aluminum an-nually (500 million cans), as much asSweden imports each year."

In the United States, the Colorado-based Coors Brewery makes a specialeffort to recycle cans: It has a contractwith its aluminum supplier that providesa discount in return for recovered alumi-num: Coors opened eight recyclinr; 1 en-ters in Atlanta, Georgia, even before itsold products there. The company eachyear collects over 50.000 tons of aluminum cans in more than 20 states.49

Though it is encouraging that Americans now recycle 54 percent of the cansthey use, ccuntries and individue sateswith container deposit legislation havemade Mika more dramatic gains.Deposits are now required on all bever-age containers sold in Sweden. Den-mark. Norway, the Netherlands. and sev-eral provinces in Canada. Nine states inthe Unit4.4 States now require suchdeposits. and the recent addition of NewYork. the country's second most popu-lous state, to this list represents majorprogress for recycling. (See Table 6-6.)Return rates of both bottles and cansexceed 00 percent in most states wherethe programs have been in effect longenough to be measured, almost twice theU.S. national rate.

In almost all states with container de-

Table 6-$. United States: States withBe vesagr Container Deposit Laws

RefillableBottles CansState

(percent teturned)Or .gun r 19721 95 92l'crinoni :1973) 93 90lltaitie (1078) 93 93Michigan (1979) 96 96Iowa (1979) 96 90Connecticut (1980)Massachusetts (1983)Delaware (1983)New York (1983)

.111111 .IIMPIP

III MINNI.

a.. .11

sootcEs: William K. Shlreman, Can and Batik Bills(Stanford, Calif,: Caltfomia Public Interest Re-search Group and Stanford Environmental LawSociety, 19B1): U,S. General Accounting Office."States Experience With Beverage Container De-posit Laws Shows Posstive Benefits." Washington.D.C., December IL 1980.

posit laws, total litter has been reducedby 35 to 40 percent by volume, and bev-erage container litter by 75 to 86 per-cent. No state with a bottle bill has lostjobs on a net basis. Though containerrecycling may reduce jobs in materialsproduction and container manufactur-ing, it creates jobs in container collec-tion, transportation, and reprocessing.In Oregon, the U.S. pioneer in this pol-icy. a net total of 200 jobs were created.In Michigan, the first state to test con-tainer legislation in a densely populatedurban setting, 4.600 jobs were created.A nationwide beverage container law inthe United States would, according tothe U.S. General Accounting Office, cre-ate a net total of 100,000 jobs. As anadditional benefit, litter cleanup costscould be reduced: in Maine, they werehalved. For all these reasons, almostthreequarters of the U.S. populationfavor container deposit legislation."

Promoting the use of aluminum con-tainers in preference to others might ac-tually conserve resources. The steel can,when it is tin plated, is so difficult to

Recycling Atatenals (109)

recycle that even the rec ycling industrycalls it "a can of worms."51 "Tin" cans.which are mostly steel with a thin coatingof tin to prevent corrosion. are not easilyrecyclable because the tin fuses with thesteel. Most recycled tin cans, in fact. areused as a catalyst in copper production.The metal in limn is a( tually consumedin the process and cannot lie recovered.The aluminum can. which is readily re-cyclable. could beneficially replace steel-alloy or bimetal cans. and even glass.Both glass production and recycling bro-ken glass are energy-intensive processes.and unless a returnable bottle is re-usedat least ten times before being discardedor crushed. it offers no energy savingsover recycled aluminum cans Replacingthe steel and glass now used for foodcontainers with alumintun would thussave energy and materials."

Twenty reverse vending machinesin Denver, Colorado, paid out over$1 million in an 18-month period.

Continued growth in recycling will de-pend on both market development andscrap collection. international markets.especially in developing countries. couldproside the impetus for increasing col-lection in countries with high consuntp-tion rates. Investments in secondaryrecovery can be encouraged by interna-tional lending agencies. by nations thatwant to improve their balance of trade,by entrepreneurs. and by environmen-talists. International banks could exploitthis opportunity to promote environ-mentally acceptable and economicallysustainable growth with a technologythat produces aluminum for half the cap-ital of primary facilities with only 5 per-cent as much energy. The World Bank,unfortunately. has apparently all but ig-nored 'tis potential in the late-1983

draft of its forthcoming "World Alumi-num Industry Study," preferring insteadto ask traditional questions about howmuch new electric capacity investmentwill be required to run primary facili-ties."

National governments, moreover. stillseem interested ntainly in primary alu-minum production. The response of theMinistry of International Trade and In-dustry in Japan to the high cost of pri-mary production there has been to movethe industry to developing countrieswith cheap hydroelectric power.

Secondary aluminum provides an al-ternative to environmentally trouble-some additional primary aluminum pro-duction. But taking advantage of thealternative will require investing timeand money in campaigns to enact con-tainer deposit legislation. an assuranceof free trade in scrap. and the introduc-tiott of energy pricing policies that re-flect the real economic cost of energy,

IRON AND STEEL

The world steel industry now uses scrapfor 45 percent of its irott requirements,and many countries rate high marks foriron and steel recycling. (See Table 6-7.)Those with some of the best recordsBelgium and Luxembourg, Czecho-slovakia, Italy. Spain. the United States,and West Germanyuse scrap for 60 to75 percent of the metal used in steel-making, if steel mill scrap is included.54But steel mill scrap basically just recircu-lates in the production process. meaningthat these percentages would be onlyhalf as large if only purchased scrapscrap km.. fabricators and consumerswere counted. Post-consumer scrap re-covery represents only one-quarter ofthe iron and steel recycled, and W theUnited States is any indication, only 45

125

(Ito) State of the 1Vorld-1984

Table 6.7. Steel Consumption and ScrapRecycling, Selected Countries, 1980-82

Annual SteelConsumption Recovery

Country Per Capita Rate'

(pounds) (percent)Belgium.tit. 714 40United Kingdom 715 35United States 1,120 35Netherlands 723 35Japan 1.387 31

Poland 1.162 31

Czechoslovakia 1.607 30Spain 514 29West Germany 1.210 27Italy 1.010 24

Sweden 1,096 24Brazil 291 21

India 40 21Soviet Union 1,250 17

China 99 9

World Estimate 400 25'Represents steel scrap collected (excluding

steel null scrap and including net exports) as apercent of steel consumed; threelear average.swam: Worldwatch estimates based on U.S. Bu.reau of Mines, Minerals Yearbook. 1981. tot111(Wasl,mgton. D.C.: 1982). Statuhwal Abstracts. 1983(Washington. DZ.: U.S. Got-eminent PrintingOffice, 1983), and unpublished data provided bythe Bureau International de la Recuperation, Brus

percent of the iron and steel thatbecomes obsoleteready for recyclingfollowing consumer useis actually re-cycled each year.s5 (See Figure 6-2.)Moreover, this rate is only half as high asin 1955, when the high rates encouragedby World War II still lingered.

One measure ofthe lack of progress iniron and steel recycling, in fact, is theincrease in the stock of obsolete scrap.In 1978, the backlog of recoverable fer-rous scnip in the United States alone to-taled over 600 million tons. Since then,it has grown to 680 million tons and isexpected to grow further.%

Certain countries appear to have farworse recycling records than others iniron and steel. Among East Europeannations, Czechoslovakia, Poland, EastGermany, and Hungary consume scrapat relatively high rates. The SovietUnion, however, ranks as one ofthe low-est users of scrap in the world, with a ratehalf that of Japan, the United States, orWest Germany. Argentina, Brazil, China,and Yugoslavia consume very low levelsof scrap. Necessity again appears to be atwork, for countries with sufficient indig-enous sou:ces of iron ore do less recy-cling.

But using iron ore because 1' avail-able may be a false economy. Scrap costslittle more than iron ore and can be con-verted to steel with much lower capitalcosts. The most vibrant sector of theU.S. steel industry, in fact, is the "mini-mill," which includes electric arc fur-naces. These use virtually 100 percentscrap, compared with 45 percent in openhearth furnaces and 28 percent in basicoxygen furnaces. Use of electric arc fur-naces has grown dramatically around theworld, especially in the countries withthe highest recycling rates. The NUCORmill in South Carolina exemplifies theadvantage of building a "minimill" withan arc furnace: The mill earned a profit

Percent100

75

50

25

Sources: Robert R. Nathan Associates;hut. of Scrap Iron and Steel

i I

19_60 1970 1980 1985

Figure 6 U.S. Iron and Steel Scrap Use(m a Percent of Scrap Generated), 196042

126

Recycling Alaienals (in)in 1982 during one of the worst yearsever in the steel industry.57

A valuable new iron ore reductiontechnique. direct reduction of iron(DRD. eliminates coking and reduces en-ergy costs. The pig iron produced byDRI is even called artificial scrap. Manycountries. includittg Brazil and Nigeria.have adopted this technology. Total cap-ital costs for direct reduction, however.run as high as for conventional steel pro-duction. Despite the advantage of scrap-based production. Braiil still has one ofthe world's lowest rates of scrap utiliza-tion.

Nigeria has recently moved to elimi-nate its dependence ort imported steelby investing in DRI. At a new mill, di-rectly reduced iron is mixed .,:;th scrapin four new electric arc furnaces, withscrap supplying 25 percent of thecharge. The result has been unsatisfac-tory. however, since the total cost ofNigerian steel is $880 per ton comparedwith import prices of $315-450. Nigeriamight instead have collected more of thecars now rusting in junkyards around thecountry and processed them in electricarc furnaces. The cost of scrap-basedsteel would probably have been evenlower than the most favorable finishedsteel import price and only 25 percent oftheir current production costs." Thus.developing countries with or withoutiron ore resources should find electricarc production the technology of choice,followed by direct reduction of iron ore.

Developing countries and all nationsnot well endowed with scrap may thinkthat investing in electric arc furnaces isunduly risky. History has shown thatscrap exports have been and could easilyagain be restricted. American steel-mak-ers have consistently sought to keepscrap prices low by lobbying the govern-ment to restrict the export of scrap. Suchpolicies seriously diminish the prospectfor iron and steel recycling. Theythreaten the $11-billion world ferrous

scrap industry, in which the UnitedStates has the largest stake. In 1980, be-fore the worldwide recession devastatedthe scrap business, U.S. scrap dealershandled more than $5-billion worth ofscrap. about 15 percent of which was ex-ported. In 1980, the United States ex-ported more than I1 million tons ofscrap worth almost $1.3 billion, for 75percent of the world's net internationaltrade in iron and steel scrap."

U.S. steel-makers may have legitimatecomplaints about unfair trade practicesin some steel-producing nations. West-ern Europe, for example. provides ex-tensive subsidies to steel-makers, manyof which are owned in large part by gov-ernments. These subsidies are not re-flected in steel prices and therefore notonly permit unfair competition but alsodiscourage more-cost-effective produc-tion, meaning greater use of scrap." Justas the defense of free trade requires themaintenance of open borders. it also re-quires regulation of unfair trading prac-tices.

Many metals are alloyed with iron toincrease its strength, resistance to rust-ing, and ductility. Sorting, separating.and reprocessing these alloys has be-come a sophisticated business. Scrapprocessors now use shredders, flotationdevices, melting furnaces, and otherequipment to prepare complex mixturesof scrap metals for recycling. An auto-mobile. for example. contains not onlyiron and steel but also copper wire andzinc handles. Scrap processors now areso proficient that virtually all the zinc inrecycled automobiles is recovered.These skills will have to become evenmore highly developed, however, if recy-cling of iron and steel is not going toresult in their contamination by othermetals.6'

Market development must be the firstpriority for recycling's promoters. Pro-motion would best be accomplished bystimulating investment in electric are

127

(112) Slate of the WorldI984

furnaces and removing tn.& barriers.The need to conserve energy has beenthe greatest impetus to the use of scrapbecause of the quantities of energy em-bodied in it. Eliminating subsidies forenergy production and use should be ahigh priority for promoting iron andsteel scrap recycling markets.

Norway imposed a $100 deposit onnew cars, refundable with a $50bonus for any car properly dis-posed of.

Promotion of iron and steel collectionwill be much more difficult. Beveragecontainer deposits help recover steel aswell as aluminum and glass. More im-portantly, as mentioned earlier, they vir-tually eliminate the use of the steel can.This saves resources overall. Flow con-trol laws requiring that recyclables flowto publicly owned or backed resource re-covery facilities can hurt steel recyclingjust as much as they hurt paper recy-cling. Monopolization of municipal mar-kets for scrap collection diminishes themarketability of scrap by reducing eco-nomic incentives for its collection.

Norway and Sweden have beenpraised widely for what have been calledmodel iron and steel scrap collectionpolicies. In the early seventies, 400,000abandoned car hulks littered the Swed-ish countryside. A 1976 law required thedisposal of cars with authorized scrapdealers. In Norway. 50.000 autos hadbeen abandoned. with 20.000 more eachyear being junked. Norway followedSweden's example and introduced itsown disposal law, but applied a taxrather than regulatory policy. Enacted inMay 1978, the new law imposed a $100deposit on new cars, refundable with a$50 bonus for any car properly disposed

128

of. In the first eight months of the pro-gram's operation, 33,000 car hulks werecollected, compared with an average20,000 per year before the law."

Though Norway's car deposit andSweden's disposal law have apparentlybeen successful, they would have beenunnecessary if there had not been artifi-cial constraints on the scrap market.Sweden has essentially prohibited ex-ports of iron and steel scrap since 1927,and Norway permits export of scrap onlywhen the would-be exporter demon-strates that no market for it exists in Nor-way. The result is a greatly reduced mar-ket that permits price fixing andartificially suppressed prices." Norway'siron and steel recycling rate remainssubstantially below the world average.

On the other hand, Norway producesiron ore, which in other countries hasreduced scrap use." The automobile de-posit may have helped offset this factor.The refund system reduced the cost ofabandoned automobile scrap collectionand thus encouraged recycling. A similarpolicy could be applied to spur recydingin iron ore-rich countries such as Brazil.

STEPS TO A RECYCLINGSOCIETY

As the age of cheap energy fades and asinflation, joblessness, and pollution in-tensify, sustaining material living stan-dards in rich countries and satisfyingbasic material needs in poor onesbecomes more difficult than ever. Recy-cling yields back much of the energy andcapital invested in materials. In this way,recycling conserves energy, fights pollu-tion and inflation, creates jobs, andhelps put society on an economically andenvironmentally sustainable develop-ment path.

fiery* Materials ( it 3)

The seventies 'moved t yt ling's prat -ticality and worthiapan and the Nether-lands collect half their waste paper. Suc-cessful progcams in some Japanese citieshave reduced the amount of land re-quired for waste dumps by 40 per cut.thus saving disposal costs and improvingthe environment. Beverage containerdeposit legislation in nine Americanstates has pulled recycling rates for bot-tles and cans over 90 percent. In addi-tion. Maine has cut its litter collectioncosts in half, and Michigan's economyhas gained a net total of 4,600 jobs.

The development of a dynamic inter-ttational trade in scrap paper, aluminum,and itott and steel has shown that hugemarkets can be created for collectedwaste. South Korea's ability to produce40 percent of its paper from imponedwaste paper holds out the hope thatpaper use can be expanded in increas-ingly literate Third World societies with-out increasing pressure on forests. Andbecause mills for recycling paper costhalf as much to build as those using vir-gin pulp, recycling can reduce die debtsof developing t outlines. Large importsof alumistwn scrap by Italy and Japanhave enabled them to sustain industriessuffering front the high cost of oil-firedelectricity. Spain and Italy have shownthat they can compete successfidly insteel markets by using purchased ironand steel scrap lot half their productionrequirements. And the United States,with nearly S1.3 billion annual earningsfrom exported scrap iron and steel, hasillustrated the tangible value of collect-ing waste.

Countries that have inwd toward re-cycling paper. alutninutit, and iron andsteel have thus enhanced their competi-tive position in international markets.Recycling will become an even more im-portant factor in international competi-tiveness as energy and capital costs in-crease the expense of producing goods.

Despite these gains. the world has

fallen far short of achieving recycling'spotential. The glohal recovery rates ofpaper, aluminum, and iron and steelcould be doubled or tripled for each ma-terial. But three difficult steps must betaken to collect recyclable materials andto develop additional ntarkets for them.

As a first step, consumers should paythe full costs of the materials they use.The world's forests have been cut fasterthan they have been replaced, a practicethat makes wood cheaper now at the ex-pense of future generations. Settingaside additional forest reserves wouldmake virgin pulpwood more expensivecompared with waste paper and wouldboth assure the protection of some for-ests and encourage paper companies tobuy waste. As owner ofhalf the softwoodtimher in the United States, the U.S. For-est Service should consider reducingsales of trees for harvesting as long aswaste paper is underutilized.

The global recovery rates of paper,aluminum, and iron and steel couldbe doubled or tripled for each ma-terial.

The first step also requires a specialeffin t to reduce energy price subsidies.No single factor has increased recyclingmore in the last 30 years than the energyprice increases of the seventies. Recy-cling saves energy, and industries adoptit to cut energy costs; but when the priceof energy is distorted by subsidies, in-dustries are less motivated et, recycle.Titus when societies subsidize energyuse by providing grants or loans fordarns and power plants or by applyingmeasures that hold the price of energybelow replacement costs, they encourage environmental degradation. To sub-sidize energy consumption is to subsi-

129

(11.)) State of the World-1984

daze the "throwaway society."The second step toward a recycling

society involves building world marketsfor scrap paper. aluminum. and iron andsteel. Wealthy countries restrain the ex-port of scrap iron and steel and seriouslyinhibit the use of imported scrap in de-veloping countries. The European Eco-nomic Community, for example, re-stricts scrap trade between its membersand nonmembers. Austria, Denmark.and Sweden prohibit essentially all scrapexports, and the United States continu-ally considers limiting scrap exports.Few countries needing new steel pro-duction capacity will risk reliance on im-ported scrap unless scrap-exportingcountries remove the threat of scrap"embargoes."

The final step, one that will also re-duce environmental subsidies, promoteinternational scrap trade, And soften theimpact of higher energy pr ices, demandsthe greater collection of wastes. Con-tainer deposit legislation can dramati-cally increase the return of beveragecontainers. Incentives, int rmation. orthe threat of fines and nor . ollection ofgarbage can induce higher returns of re-cyclable material. A wide variety of poli-cies, in fact, will stimulate recycling and

130

an be applied at national or local levels.These steps will not be taken simply

because they are logical or urgentlyneeded, but because concerned citizensinsist that they be taken. Conservation-ists, unfortunately, have shown too littleinteres. in assuring market pricing forenergy and free trade of scrap materials,though they have much at stake in thesepolicies. National and local governmentleaders have shown little willingness totake the difficult step of requiring collec-tion of recyclable materials, but the ris-ing costs of litter cleanup and Iandfillingwaste are bound to press them to do so.Industry leaders M individual countrieswill increasingly be forced by higher en-ergy and raw materials prices to considerrecycling or face a future in which theycannot compete in world markets.

The future of all society will be an un-easy one if a major portion of the worldis forced to live with a low or decliningmaterials standard. Materials recyclinghas become necessary if society is simplyto maintain current living standards. Butwithin this necessity lies the opportunityto improve the material well-being of allthe world's people, and to do so withoutgreat cost to the environment. In thisresides the great virtue of recycling.

7

Reassessing

the Economics ofNuclear Power

Christopher Flavin

The eighties were supposed to be a dec-ade of booming construction and copi-ous electricity generation for the nuclearpower industry around the world. TheOrganisation for Economic Co-opera-tion and Development (OECD) pro-jected in 1970 that its member nations inWestern Europe. North America, andJapan would have 563,000 megawatts ofnuclear generating capacity by 1985approximately half the total generatingcapacity these countries now have.'Over 100 nuclear power plants a yearwere expected to be built during theeighties, many of them in the ThirdWorld.

Today, just a decade after some of therosiest of these forecasts were made, the

Many of the issues in this chapter are discussed ingreater detail in Christopher Flavin, Atka, Power.The Market Tea (Washington. D.C.: Worldwatch In-stitute. December 1983).

IvI

world is using less than half as much nu-clear power as anticipated. Projectionsof future use have shrunk even more.Estimates for 1990 now show a nuclearsector only a third as large as once ex-pected.'

The largest curtailments have oc-curred in the United States, where can-cellations of plants have outrun new or-ders for nine years, but with only a fewexceptions countries around the globehave cut back on their plans. The nuclearpipeline is now likely to run dry in mostcountries by the end of the decade. TheFinancial Times Energy Economia, a news-letter of the international energy estab-lishment, reported in early 1983 that"the day when nuclear power will be theworld's leading electricity source nowseems to have been postponed indefi-nitely."

Nuclear power is plagued by many se-

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(116) State of Me World-1989

rious issues that remain unresolved. in-cluding safety, waste disposal, and nu-clear weapons proliferation. Somethingmuch simpler, however. is giving the in.dustry most of its current problems. Inmost countries nuclear power is nolonger economically attractive. Years ofcost overruns have destroyed the eco-nomic underpinnings of many pro-grams, and much slower growth in elec-tricity use has called into question theneed for many nuclear plants now beingbuilt. All indications are that nuclearpower's economic competitiveness con-tinues to deteriorate and could lead tofurther cutbacks. Indeed, the develop-ment of nuclear power may come to acomplete standstill by the late eighties.

THE SELLING OF NUCLEARPOWER

Commercial nuclear power has a shorthistory. Although the atom was firstfissioned in Germany in 1938, a decadeand a half later weapons of mass destruc-tion, nuclear submarines, and some im-portant medical uses of radiation werethe only real "fruits" of the nuclear age.Yet enthusiasm ran high. To many peo-ple nuclear power seemed the key to theworld's future. It would supply infiniteamounts of energy indefinitely andwould remove many of the constraintsunder which humanity had struggled formillennia.

In the early fifties, both the UnitedStates and the Soviet Union greatly ac-celerated their R&D programs to commercialize nuclear power. Many differ-ent reactor designs were tested andenormous technological strides weremade. One result was the world's firstelectricity producing reactors: a smallbreeder plant built by the United States

in 1951 and a fivemegawatt light-waterplant built by the Soviet Union in 1954.4

The efforts of other countries to de-velop nuclear power in the fifties werehampered by the superpowers' early monopoly of nuclear technologies and fuelsupplies. Among the governments thatnevertheless launched substantial nu.clear power programs were those ofCanada. France, the United Kingdom,and West Germany, each pursuing itsown approach to nuclear technology.Progresft was slow due to the unexpect.edly challenging engineering requiredand to the difficulty that all countries hadgoing from tiny prototypes to commer-cial plants.

Private companies showed little inter-est in spearheading the commercializa-tion of nuclear power, and so it was leftto the U.S. Government to go where theFortune 500 feared to tread. During thefifties, the United States spent hundredsof millions of dollars on a Power ReactorDemonstration Program in which largecorporations built a half-dozen prow-type plants. Then a major effort wasmounted by the U.S. Atomic EnergyCommission and nuclear equipmentmanufacturers to convince utilities thatnuclear costs could be substantially low.ered.

Still, utility companies demanded 'aguarantee that nuclear plants would becheaper than the alternatives. In Decem-ber 1963 General Electric and the JerseyCentral Power & Light Company signeda contract for a "turnkey" nuclear plantthat General Electric would build at a setprice, competitive with the cost of a coal-fired plant. For the utility there was littlefinancial risk, since it would simply paythe agreed bill and then "turn the key"to commence generation when construc-tion was complete. This milestoneagreement was followed by eight similarcontracts, effectively launching commer-cial nuclear power in the United States.5

The next stage came quickly. In 1966

132

Brosiessing the Economics of Nuclear Power 017)

and 1967. the utilities ordered 51 addi-tional nuclear plants, signing open-ended, cost-plus contracts that shiftedthe burden of potential cost overruns tothe utilities and their customers. By theend of 1967 the United States had 28times as much nuclear power capacity onorder as it had in operation. Four U.S.nuclear reactor vendors competed ag-gressively for new orders, and utilitiesstruggled to stay at the forefront of tech-nology. Nuclear power was seen as theinevitable way to ineet future electricitydemand, which was growing at fasterthan 7 percent a year.6

This "bandwagon" psychology left lit-tle room for dispassionate analysis of theeconomics of nuclear power. Utilitieshad little understanding of these plantsand the much more demanding engi-neering that would be required. Eachnew buyer was cited by the reactormanufacture's as proof of the economicsoundness of their claims. The nish tonuclear power had become a self-sus-taining processself-sustaining, per-haps. but not sustainable indefinitely.7

Beginning in the mid-sixties, U.S.companies assisted by the government's"Atoms for Peace's program aggres-sively marketed nuclear technologies inEurope, japan, and some developing na-tions. More than a dozen countries pur-chased U.S. plants or signed licensingagreements to obtain American nucleartechnology. Today France, Japan. andWest Germany. which along with theUnited States plat) a prominent role inthe nuclear power industry, all buildplants based on American designs. Withthe rapid growth of electricity demandand the relative scarcity of indigenousenergy resources in Europe. there waslittle challenge to the notion that thecommercialization of nuclear power de-served a high priority.

This period was also marked by agreat expansion of programs in theThird World. Nuclear power was wel-

corned as an alternative to imported oiland as a way for developing countries topropel themselves into the twentiethcentury. Exports of the technology werevigorously promoted by the Interna-tional Atomic Energy Agency of theUnited Nations and by government insti-tutions such as the U.S. Export-ImportBank. Sixteen developing countries hadnuclear power programs by the mid-sev-enties. sotne of them nations that stillrelied on fuelwood as their major do-mestic energy source.9

The development of nuclear powe,may come to a complete standstillby the late eighties.

By 1973, worldwide nuclear power ca-pacity had risen to 43,000 megawatts,provided by 115 plants. The UnitedStates had half the total capacity andBritain one-eighth. France and the So-viet Union each had the equivalent ofthree 1.000-megawatt nuclear plantsand Canada, japan, and West Germanyonly two each. But nuclear constructionprograms were in full swing in a half-dozen countries, and a dozen more hadplans to begin soon. In the peak growthyears of 1971-74, over 200 plants wereordered worldwide, approximately dou-bling the number of planned reactors.Total capacity was expected to exceed250,000 megawatts by the early eight-ies.9

The 1973-74 oil crisis was widely so nas the final guarantee that nuclear powerwould be the world's next preeminentenergy source. Western political leadersin particular saw nuclear power as thenecessary high-tech solution to thestranglehold the Organization of Petro-leum Exporting Countries had on the oilmarket. The Nixon administration's Pro-ject Independence aimed for nuclear

133

(118) Stage of the World-1984

power to supply haliof U.S. electricity bythe year 2000. French Prime MinisterJacques Chirac undoubtedly spoke formany political leaders in the aftermath ofthe oil embargo when in early 1975 hesaid, "For the immediate future, I meanfor the coming ten years. nuclear energyis one of the main answers to our energyneeds."10

Today nuclear power supplies muchless energy than was expected in themid-seventies. But it has grown substan-tially nonetheless. As of late 1983. a total

Country

of 282 commercial plants in 25 countriesprovided over 173,000 megawatts ofgenerating capacityenough to supplyapproximately 9 percent of the world'selectricity, or 3 percent of total energy.(See Table 7-1.) In industrial countriesthe share of electricity supplied by nu-clear power varies widely, from approxi-mately 40 percent in France to 17 per-cent in Japan, 13 percent in the UnitedStates, 6 percent in the Soviet Union,and zero in such nations as Australia andDenmark that have decided to forego

Table 7.1. Worldwide Nuclear Power Commitment, by End of 1983'

Plants Orderedand Under

ConstructionPlants

OperatingTotal

Commitment

{number) (megawatts) (number) {megawatts) {number) (megawatts)

United States 77 60,026 64 70.376 141 130,402France 31 21.778 31 34.520 62 56.298West Germany 12 9.806 17 19,516 29 29,322Soviet Union 34 18,915 11 9,880 45 28.795Japan 25 16.652 15 12.649 40 29,301Spain 6 3,820 7 6,801 13 10.621

Canada 12 6.622 12 8.710 24 15.332United 34 9,273 8 5.115 42 14,388

KingdomSweden 10 7,300 2 2.110 12 9,410South Korea 1 556 8 6,710 9 7,266Switzerland 4 1.940 3 3,007 7 4,947Czechoslovakia 2 880 8 3,520 10 4.400

Italy 3 1,285 3 2,004 6 3,289India 4 804 6 1.320 10 2,124Belgium 5 3,450 2 2,000 7 5,450Taiwan 4 3.110 2 1,814 6 4.924East Germany 5 1,830 2 880 7 2,710Brazil 3 3.116 3 3,116Argentina 1 335 2 1,292 3 1.627

Rest of'World 12 5,205 21 14.044 33 19,249

WorldTotal 282 173,587 227 209.384 509 382,971

lPreliminary estimateSovitcE: "The World LIU of Nuclear Power Plants," .Vitekar News. August 1983: Atomic IndustrialForum. "Historical Profile of U.S. Nuclear Power Development." Washington, D.C., March 1983.

134

lleatwsurtg the Economtcs of Nuclear Power 019)

this power source altogether. In the nextthree years, about 100 nuclear plants arcscheduled to commence operation.which would boost global nuclear capac-ity by 60 percent, Beyond the mid-eigh-ties, however, the picture is much lessclear.

COUNTING COSTS

Thirty years have passed since U.S. nu-clear officials were quoted as saying thatnuclear power would be "too cheap tometes." It WAS an unfortunate claim thatthe industry now wishes had never beenmade. These words will haunt themnonetheless, for they mark the begin-ning of a sad history of bold assertionsand unsupported analysis that led toenormous uncertainly about the actualcost or economic merits of nuclearpower. Even today it is difficult to find inany country a ftill and fair accounting ofthe economic status of nuclear power.

Cost estimates for nuclear plants inthe United States have been rising eversince the first commercial plants werestarted in the early sixties. Most of theearly evidence of economic troubles wasignored by experts who assumed thatcosts would begin to decline as the tech-nology improved. Utility executives sig-naled their confidence by ordering 126nuclear power plants between 1971 andthe end of 1974enough to increaseU.S. generating capacity at that time bynearly half."

But construction costs continued torise throughout the seventies, and in1981 economist Charles Komanoff pub-lished the first detailed assessment of theincreases. Using the utilities' own data,but carefully separating out the effects ofinflation and the cost of borrowedmoney, Komanoff concluded that real(inflation-adjusted) construction costs

for nuclear power plants had risen 142percent between 1971 and 1978, or 13.5percent annually. Based on thesefigures, Komanoff concluded that totalgenerating costs for a nuclear plantwould soon exceed those for a coal plantby a wide margin.l?

The nuclear industry vigorously dis-puted these estimates, largely on thegrounds that statistical analysis of the re-cent past was not a reliable predictor offuture trends. Since the mid-seventies,however, cost estimates for individualnuclear plants have doubled every fouryears, rising faster than prices for gaso-line, housing, or any other major ex-penditure. Reactors completed in theearly eighties will cost on average almost$2,000 (1982 dollars) per kilowatt tobuild, over twice as much as coal plants,And because of the high costs and longconstruction times, the financingcharges fora nuclear plant are now threetimes those for a coal plant and add ap-proximately $500 million to the averageconstruction bill's

Since the mid-seventies cost esti-mates for individual nuclear plantshave doubled every four years.

Some projects make these averagefigures look like bargains. The Limerick1 plant in Pennsylvania is now budgetedat $3.4 billion and the Nine Mile Point 2plant in New York at between $4.6 bil-lion and $5.6 billion. Several recentlycanceled plants would have cost as muchas $8 billion each had they been comp-leted. Even the few economic "successstories" pointed to by the nuclear indus-try, such as the Palo Verde plants in Ari-zona, have suffered huge cost overrunsthat would be considered crippling inany other industry. Nuclear economics isnot for the fainthearted. The annual cost

135

WO State of the World -1984

overruns alone equal the goverimientbudgets of many nations."

Operating costs for nuclear powerplants, once expected to be negligible,have turned out to be another budget-buster. A 1982 study by economists withthe Energy Systems Research Groupfound that operation and maintenancecosts rose during the seventies at an av-erage annual rate of 18 percent. By theearly eighties. the average nuclear plantcost more than $30 million a year to op-erate, enough to add approximately 20percent to the generating cost."

The economics of U.S. nuclear powerhave also been hurt by plants operatingon average at less than 60 percent oftheir rated capacity rather than the75-80 percent of capacity originally ex-pected. A range of technical problemsthat have required plants to be run atpartial capacity and to shut down fre-quently for repairs are to blame. Sincetwo-thirds of the cost of nuclear electric-ity comes from construction costs thatmust be paid regardless of whether theplant is operating, low capacity factorsgreatly increase the cost of power."

U.S. industry and government studieshave been slow to recognize the declin-ing economic competitiveness of nuclearpower. Cost estimates for individualplants continue to miss the mark by awide margin and are commonly adjustedupward by several hundred million dol-lars each year. Industry-wide studiesoften make selective use of data orblithely assume that costs will be re-duced and capacity factors improved.Many studies, failing to distinguish be-tween real-cost trends and the effects ofinflation, simply assume that all in-creases are caused by inflation and highinterest rates.

Yet even government and industryofficials are now much less bullish on theeconomics of nuclear power than theyonce were. In boardrooms and at regula-tory hearings, cost overruns are fre-

quent ly cited as a major problem. Care-ful analysis of the utilities' own data forthe 30-odd U.S. plants scheduled forcompletion in the mid-eighties showsthat the electricity they produce will coston average from 10-120 per kilowatt-hour (1982 dollars)."

'Phis cost is 65 percent more than coal-fired power and 25 percent more thanoil-fired power, the high cost of whichhas often been cited as a major reasonfor building nuclear plants. (See Figure7-L) If all the electricity used by Ameri-cans were to cost as much as that gener-ated by these new plants, the country'sutility bills would rise approximately 130percent.is

Enough information is now availableto show conclusively that new nuclearpower plants are no longer cost-effectivein the United States. Even if all theunique safety and health risks of nuclearpower were removed and cost escalationwere halted, a U.S. utility planner choos-ing between a coal and a nuclear powerplant based solely on economic consid-erations would have to select coal. In ad-dition, nuclear power carries financialrisks that frighten many utility execu-

Cetus PerKilowatt-Hour

10

Sourer: Worlduauth

lut 1982dollars) 111111111

Waste disposal &decommissioningFuelOperation andmaintenance

Financing

Directconstruction

Oil Coal Nuclear

Figure 7-1. Average Generating Costs for NewU.S. Power Plants, 198$

1 36

ReillithiPig the Economics of Nuclear Power (121)

lives. S. David Freeman. a Director ofthe Tennessee Valley Authority. whichonce had the largest nuclear construc-tion program in the United States. con-cluded in 1982: "The cost of nuclearpower isn't just high. it's imp:edict:0)1e.No sane capitalist is going tt, build some.thin 'or which he can't derive a cost/benefit ratio because the cost is unknow-able."12

Outside the United States, the eco-nomic status of nuclear power is moreeillicult to calculate. In most countriesthe data base is quite slim due to thesmall rwmber of plants in operation, sostatistical studies yield limited results.Furdici i omplic acing the situation is thefact that most nations do not release thecost figures for individual nuclear plantsthat are essential for solid economic con-clusions. As in the United States, compa-nies and gm ernment agencies stronglyconunitted to nuclear power selectivelyr ease data. The picture is somewhattc.orky but appears to show high andgrowing costs worldwide.

Fairly good data are available for theUnited Kingdom, where the goserntnentis in the midst of a major decision on thefuture of its nuclear program. The na-tionwide government -owned utility, theCentral Electricity Generating Board(CEGB). has proposed that the countrybegin building a new generation of light-water nuclear plants based on theAmerican Westinghouse design. Con-siderable controversy surrounds the eco-nomic soundness of the proposal. TheCEGB now admits that the country'smost recent gas- cooled nuclear plantcost twice as much to build as coal-firedplants. but it still argues that light-waterplants can be produced at an attractiveprice."

CEGB's analytical techniqueshave come under attack in the course oflengthy hearings over the program. Oneof the most telling critiques comes fromGordon MacKerron of the University of

Sussex, who concluded in a 1982 reportthat CEGB estimates for plants alreadybuilt in the United Kingdom were biasedin favor nuclear power by failing tocalculate .1'. full value of past capital in-vestments. The CEGB. MacKerronfound, hart not distinguished clearly be-tween current and constant dollar costsor even between historical figures andprojections.'4

J.W. Jeffrey. a retired University ofLondon professor, conducted a thor-ough economic assessment of Britishnuclear plants and concluded that nu-clear power is considerably more expen-sive than coal-fired power. Although hisfigures were at first vigorously disputed.the CEGB was forced in 1983 to recantmany of its earlier claims about the eco-nomic superiority of British nuclearplants. The case for light-water plants isstill being made, but the tide seems tohave turned against the proposal. Manyobservers agree with Jeffrey: "Nuclearpower has not been economic, is not eco-nomic and is likely to get more uneco-nomic in the future."22

West Germany has a larger and moresuccessful nuclear power program thanthe United Kingdom does, but it hassuffered from major cost overrunsnonetheless. Official figures compiled bythe country's largest utility show directnuclear construction costs rising sixfoldbetween 1969 and 1982 while coal plantconstruction costs went up 3.5 times. YetWest German nuclear officials still main-tain that nuclear power has a 30 to 50percent economic advantage over coalpower. This claim is now being used asjustification for a government proposalto order as many as five additional plantsin the mid-eightiesin a country thathas only ordered one plant since 1975."

The price of ro1 is quite high in WestGermany. so there is some basis for theclaim that nuclear power still has a gen-erating cost advantage over coal -firedpower, but it is unlikely that nuclear

137

(1221 State of the ll'orld--1984

power can overcome a capital cost mar-gin as large as the one that officials nowadmit to: Critics charge that German nu-clear planners have consistently under-estimated expenses and have used ac-counting methods that do not measurethe full costs. A study by Jurgen Frankeand Dieter Vie !hues of the Freiburg In-stitute concluded in 1983 that due to therapid escalation of construction ex-penses and interest rates, nuclear elec-tricity now costs at least 60 percent morethan coal-fired powers*

France is a key country in making in-ternational comparisons of nuclear eco-nomics, since the French nuclear con-struction program has an internationalreputation for efficiency and speed.Whereas U.S. nuclear plants take on av-erage eight to ten years to build, Frenchplants go up in less than six. OfficialFrench figures published in 1982 showreal capital costs rising just 43 percentbetween 1974 and 1981. This works outto an annual rate of increase of 5 per-cent, one-third the rate in the Americanand West German nuclear industries.French planners maintain that nuclearpower 1s 20-40 percent less expensivethan coal-fired power.ss

The scanty cost data released byFrench authorities make it difficult todraw conclusions, and there is no way toverify the official numbers. Most of thefigures released are 4ggregate numberscompiled by planners with a vested in-terest in the economics of their program.And as no data are available for individ-ual plants, it is impossible to confirm thefigures or to correlate them with relevantvariables. Also, Electricite de France(EDF) has run up a debk of $19 billion onits nuclear program. It is quite possiblethat hidden behind EDI's complex ac-counting practices are substantial subsi-dies for nuclear power.26

At least in relative terms, however, theFrench program has been an economicsuccess. The margin may not be as large

as official figurs indicate, but nuclearpower in France do s appear to be lessexpensive than coal-fired power. One ca-veat to bear in mind, however, is thatalthough capacity factors have generallybeen high and operating costs low, since1982 many French plants performedpoorly, which is likely to raise costs.Only more time and experience will tellhow economical France's ambitious pro-gram really is.

The limited information available forother nations also shows substantial costincreases during the last decade. InJapan, average real construction costshave gone from $350 per kilowatt in theearly seventies to $1,000 per kilowatt inthe early eighties (in 1982 dollars) ac-cording to utility industry sources. Theofficial Soviet figures released in the lat-est Five-Year Plan report that nuclearplants are 80-100 percent more expen-sive to build than coal plants. Datareleased by Ontario Hydro, the builderof Canada's CANDU nuclear plants,show that construction costs went from$400 per kilowatt in 1972 to $1,700 inthe early eighties, a real rate or tucreaseof 6 percent after accounting for infla-tion. And in India the government nowadmits that nuclear power is much moreexpensive than coal-fired electricity."

Eighty-seven nuclear plants werecanceled in the United States be-tween 1975 and November 1983.

Comparing nuclear economics inter-nationally in strictly quantitative terms isa hopeless endeavor. Not only are com-prehensive and reliable data scarce, butconstant variations in inflation, ex-change rates, and fuel costs make it diffi-cult to apply common standards acrossnational boundaries. Enough figures areavailable, however, to show that cost

138

Reassessing the Etonomics of 1"urlear Power

overruns have been most severe in theUnited States, West Germany, and theUnited Kingdom. But substantial cost in-creases above inflation appear to havebeen near-universal--even in such"model" nuclear countries as Franceand Japan. This has badly hurt nuclearpower's economic standing comparedwith its most direct competitorcoal-fired power. Perhaps most disturbdigfrom a long-term viewpoint is that al-most everywhere the situation seems toworsen over time. Many countries al).pear poised to repeat the disappointingeconomic experience of nuclear powerin the United States.

A U.S. FINANCIALMELTDOWN

The first signs of trouble for the U.S.nuclear industry came just after itsgrowth binge of the early seventies.Eleven projects were canceled in 1975and another 32 from 1976 through1979. During the same period only 13nuclear plants were ordered. Many en-ergy analysts argued at the time that thiswas a mid-course correction. a down-ward blip in nuclear power's healthy,growing future. They were wrong. Theearly eighties have witnessed a massivetrimming of nuclear power programs bymost of the country's utilities. Plans for16 plants were scrapped in 1980; 6 in1981; and a record 18 in 1982.28

For some utilities the cancellationsconstituted a major shift in their plans.The Tennessee Valley Authorityreneged on 12 out of 17 nuclear plantsit had planned to build and the PublicService Electric and Gas Company ofNew Jersey dropped plans for 5 out of 8,All told, 87 nuclear plants were canceledin the United States between 1975 andNovember 1983, with a net loss in future

ThousandMegawatts

300

200

100

Source: Atom(Industrial Pons*

ratingnumummiutu

1965 i970 1975 1980 1985Figure 7-2. U.S. Nuclear Power Cautraitment,

J965-83

nuclear generating capacity of 83,000megawatts. (See Figure 7-2.) This is 30percent more nuclear capacity than theUnited States currently has, enough tomeet the electricity needs of any countryexcept the Soviet Union or the UnitedStates. Meanwhile, U.S. commitments tocoal-fired plants had a net increase of58,000 megawatts.29

The depth of the nuclear recession inthe United States is illustrated by the factthat only two plants ordered in the lastnine years have not been subsequentlycanceled. And in the last several years anumber of plants have been scrappedthat were as much as 10 or 20 percentcomplete. In 1982 alone, reactors onwhich $5.7 billion had already beenspent were abandoned, bringing thetotal bill for such plants to $10 billion.The only thing that will stop this wave ofcancellations is the rapidly shrinking listof facilities that are not at least half-builtand, therefore, very costly to give up."

Behind the cancellations lie funda-mental changes in the economic condi-tion of the utility industry. High inflationand interest rates have made it moredifficult to finance long-term, capital-intensive projects. Electricity demandgrowth has fallen from 7 percent peryear a decade ago to between 1 percent

139

(124) State of the World 1984

and 3 percent today. 'file impact of thissudden shift has been exacerbated byme fact that most utilities failed to fore-cast it correctly and have altered theirplanning several years later than wouldhave been prudent. The long lead times,large capital requirements, and soaringcost overruns of nuclear projects havewreaked particular havoc on utilities at-tempting to adapt to lower power de-mand and uncertain economic condi-tions."

In recent years, nuclear projects havebecome a dominant and damaging partof utilities' capital budgets. Annual in-vestment for nuclear construction hasrisen from $2 billion in 1970 to $19 bil-lion M 1982, a fourfold increase evenafter discounting for inflation (See Fig-ure 7.3.) Whereas nuclear plants re-quired only one-third of utilities' expen-ditures for new plants in 1970, by 1982they soaked up two-thirds. And these in-creases have occurred despite the sub-stantial drop in the total U.S. nuclearcommitment since the mid-seventies.,The amount now spent each year on nu-clear construction is more than one-fourth the annual investment of the en-tire U.S. manufacturing sector and morethan three times that of the automobileindustry."

BillionDollars50

20-

10-

Sown: Edison Ekamc MA;Amer. Public Power Auto.

iiiiiiliiillifili

MIother

1970 1475 1980 1985

Figure 74. Fieeediteres by US. Utilities forNew Comrade( Plants, 1970.11$

As capital outlays soared and electric-ity demand stagnated the financialhealth of utilities deteriorated steadily.The proportion of expenditures thatcould be met using cash on hand fell,causing a rapid increase in borrowingand stock issuance during a period ofhigh interest rates and low stock prices.The stock of many companies beganselling at less than book value. WallStreet analysts have become worriedabout the draining nuclear constructionprograms of utilities and many recom-mend against buying stock in such com-panies. The Merrill Lynch Company hasgone so Far as to publish lists of plantsthat it believes are ripe for cancella-tion."

Financial constraints have driven utili-ties with ongoing nuclear programs togreat lengths to raise capital. Borrowingshort-term funds at usurious interestrates and "creative financing" are com-mon. The Consumers Power Companyof Michigan, builder of the troubledMidland nuclear plant. has issued com-mercial paper against the utility's oil.gas. and coal inventories, sold andleased back the company's headquartersbuilding, and borrowed heavily on theEurodollar markets." When massiveemergency transfusions become com-monplace, a patient is usually in deeptrouble. The inability to finance manynuclear projects has been the key signalto cancel them. The fortunate utilitiesare those that have been able to cut theirlosses and get out early.

One company that Investors are par-ticularly concerned about is the Long Is-land Lighting Company (Liko), builderof the 820-megawatt Shoreham nuclearplant in New York. That plant, orderedin 1967, is now scheduled to be comp-leted in 1984 at a cost of $3.4-3.6 bil-lion, approximately 15 times the originalbudget. The Shoreham plant will gener-ate at most one-third of the utility's elec-tricity but its cost exceeds the book value

.140

ReasiessIng the Economics of Nuclear Pourer 1125 )

of Lilco's entire electricity system.. in-cluding other generating plants, trans-mission lines, and maintenance facilities.Electricity rates on Long Island are ex-pected to double in five years to pay forthe plant. If the Shoreham reactor is everpermitted to operate, which is now insome doubt, it will yield the most expen-sive electricity ever produced by a largecentral generating station."

Ribbon-cutting ceremonies for nu-clear facilities now often serve toinaugurate a brave new world ofhigher electricity bills.

Nuclear cost overruns have put manystate utility commissions in a difficult po-sition. They are caught between the de-sire to keep electricity affordable forconsumers and the need to provide utili-ties with enough revenue to preservetheir financial health. U.S. electricityrates have more than tripled in the pastten years after being nearly stable duringthe previous decade. Much of the in-crease stems from higher fuel prices, butrising nuclear construction costs havebecome an increasingly important fac-tor. Ribbon-cutting ceremonies for nu-clear facilities now often serve to inaugu-rate a brave new world of 30 to 50percent higher eltaricity bills, a phe-nomenon for which the term 'rateshock" has been coined. In New Englandit is believed that the twin Seabrookplants could cause rates to more thandouble."

There is no indication of an imminentrevival of nuclear orders in the UnitedStates. The Atomic Industrial Forum.which represents the U.S. industry,opened a 1982 mid-year press releasewith the optimistic assertion that "theU.S. nuclear power program enters the

home stretch of 1982 like a runnerpoised in mid-stride." But the positiveindicators the industry pointed to are thenumber of plants entering service andthe power they generateeach of whichcontinue to lag earlier projections bywide margins. No longer is the industryoffering firm predictions of when itwould stop living off pre-1975 plantsand start ordenng new ones. Perhapsthe most optimistic projection made re-cently is the Department of Energy's1982 "mid-case" projection for the year2000, which assumes that another 25 nu-clear plants will be ordered in the eight-ies. This projection is probably littlemore than a fantasy however. It is hardto find any serious analyst at this pointwho expects to see additional nuclear or-ders before 1990."

The industry's "preconditions" forthe revival of nuclear power are usuallydotninated by regulatory reform, higherelectricity rates to pay for the plantsbeing built. and lower inflation and in-terest rates. These issues hardly scratchthe surface of the industry's problemshowever. The kind of fundamentalchanges that would really be neededaguaranteed reduction in nuclear con-struction costs and a major surge in elec-tricity growthare far less likely. Thecontinuing financial crisis caused by theremaining nuclear projects hardly cre-ates a climate conducive to major newinvestment programs.

THE OUTLOOK IN OTHERINDUSTRIAL COUNTRIES

It is not just in the United States thatnuclear power faces a less secure futurethan was expected just five years ago.Although most governments with majornuclear programsincluding France,

141

WO Stole of Me World -1984

Japan, and the Soviet Unionremainstrongly committed to nuclear power,there is a growing gap between rhetori-cal and monetary support and the actualachievements of the nuclear programs.Behind the lagging pace lie diminishedgrowth in electricity demand and a longlist of technical. economic. and politicalproblems.

The total commitment to nuclearpower in Europe has risen only 10 per-cent since 1978 and almost all the gaincomes from France. The number of Brit-ish and West German projects has risenslightly, while the numbers in Spain.Swede's. Switzerland. and Italy havefallen. The changed outlook is well illus-trated by the Organisation for EconomicCo-operation and Development's 1985nuclear capacity projections. which havebeen lowered by nearly two-thirds since1970. (See Table 7-2.)

West Germany had Europe's largestnuclear program until the :ate seventies.and it has enjoyed strong support fromthe country's leaders. In recent years,however, political opposition in WestGermany has mushroomed. Majordemonstrations have occurred at a num-ber of plant sites, including one nearHamburg in 1981 that was described bythe West German Interior Minister asthe biggest police action in the history ofthe federal republic. Opponents havealso been successful in raising issues of

safety. environmental damage. and cost-effectiveness in licensing hearings and inthe courts. Project delays and cost over-runs have been common. Meanwhile,electricity growth rates have droppedsubstantially and the country has beenunder increasing economic pressure,which makes investment in major capi-tal-intensive projects much less attrac-tive."

Only one nuclear power plant hasbeen ordered in West Germany since1975, and eight of those ordered prior to1975 are not yet off the drawing boards,due largely to political opposition andongoing court battles. Only eight plantsare currently being built, four of whichare at least 80 percent complete and an-other three half done. The West Germannuclear industry suffers from consider-able overcapacity as a consequence;component manufacturers in particularare reportedly losing a good deal ofmoney, and many workers have beenlaid off."

With only about 8.000-megawattsworth of nuclear plants now under con-struction. West Germany will have lessthan half the 45.000 megawatts of capac-ity that had been projected for 1990.Preliminary approval has been given fora "convoy" of largely standardizedplants to be built in the next decade. Butwhether this proposal will survive critics'arguments that the plants are not

Table 7.2. Projections Made in 1970-83 of 1985 Nuclear Generating Capacityin OECD Countries

Area 1970 1974 1976 1977 1978 1983

(thousand megawatts)

Western Europe 202 175 167 125 84 73

United States 277 260 180 145 100 78japan 60 60 41 35 18 22Other OECD 24 18 12 13 12 10

Total 563 513 400 318 214 183

soracts: international Energy Agency. World &orgy Outlook (Paris: Organisation for Economic Co.operation and Development. 1982): Worldwatch Institute estimates for 1983.

142

Reassessing the Economises of Suclear Power (127)

needed and would be more expensivethan available alternatives is doubtful. Agrowing number of utility officials areconcerned about the rising costs of nu-clear power. With a 50 percent reservemargin in most of the country's utilitysystems. they have little incentive to wiremajor new risks.40

Unlike West Germany. France is keep-ing close to its ambitious nuclear plansof a decade ago. The country already has$0 nuclear plants in operation and 28more under construction. France nowderives 40 percent of its electricity fromnuclear power and is on course to gener-ate 75 percent by 1990. The French nu-clear program is supported by a strongcentral government that allows little op-position. Both the utility industry andFramatorr.e (the lead nuclear company)are adjuncts of the state. Moreover, thenuclear industry is an influential compo-nent of the French national economy,and the income and jobs it provides havebecome a strong political incentive tocontinue. The staying power of Frenchnuclear power was demonstrated in1981 when socialist President Mitter-rand came to office calling the nuclearprogram "excessive, even dangerous"and then proceeded with business as usu-al. supporting nuclear power strongly.41

Economic realities have proved muchmore hazardous to the F'rench nuclearprogram than political opposition. Elec-tricity growth has been gradually slow-ing since the late seventies. and in 1982the government reduced its forecast ofgrowth in the eighties by 50 percent.This means France would have at least1$ percent too much generating capacityin 1990. Such projections led Electricit6de France to introduce special subsidiesfor electric heating and to set up re-gional agencies that will encourage in-dustries to use more power. The decom-missioning of many relatively newcoal-fired plants and the export of elec.tricity are also planned. The upshot is

that even many of the strongest support-ers of nuclear power in France nowadmit that from an electricity demandstandpoint, no additional plant ordersare needed for at least several years.42

Economic realities have provedm uch more hazardous to theFrench nuclear program than polit-ical opposition.

The French nuclear program is alsobecoming a burden on already strainedcapital markets. EDF has been forced toreschedule debts and borrow extensivelyon the Eurobond market to keep con-struction going. The director stated in1982 that the utility was in its worstfinancial condition in $0 years. In 198$a high-level government committeereleased a long-term study that con-cluded that France should not order anyadditional plants until 1987. Recogniz-ing the consequences this would havefor an industry geared to handle six neworders per year, the government decidedinstead to reduce nuclear plant orderingto just two units per year in 1984 and1985: even this plan provoked warningsof massive layoffs of nuclear workers andthe possibility that France's small nu-clear supplier companies could beforced out of business.42

The French nuclear program, al-though a success politically and in nat.-row economic terms, has in a sense be-come the victim of its own achievements.Its low costs are mostly attributable to itslarge scale and to a dearth of politicalopposition, but these very factors havemade it difficult to adjust to a period ofrising costs and lower electricity de-!nand. It will be increasingly difficult forthe country's leaders to justify orderingeven two plants per year. Although in

143

(,28) State of the War Id--1984

the nineties is will almost certainly be thecountry that relics most on nuclearpower. France's full-throttle nuclear ex-pansion program may have slowed to asputter by then.

The British nuclear program is in aankh more anemic condition. Beyondthe 8.500 megawatts of nuclear capacitythat now supply 13 percent of the coun-try's electricity, only another 5,500 -megawatts worth are under construc-tion. much of which is near completion.The high cost of the plants built so faranal the forecasts that electricity demandwill grow little, if at all, in the next dec-ade provide ample economic hurdles to41 revitalised nuclear construction pro-gram. The current Sizewell Inquiry onwhether to build an American-stylelight-water plant will in effect provide averdict on the future of nuclear power inBritain. That plan, which has beenseverely challenged on economicgrounds, provides the only hope for ad-ditional nuclear orders in the near fu-ture. Without it, the nuclear industry inBritain would soon wit her.44

Programs in other northern Europeancountries are quite small and unlikely togrow rapidly in the near future. Belgiumhas five operating nuclear plants. Fin-land four, Switzerland four, and theNetherlands two; only Belgium, how-ever, has additional plants being built.Sweden had a major program under wayuntil 1980, when a national referendumon nuclear power was decided in favor ofdiscontinuing the program and phasingout all the country's nuclear plants bythe year 2010. Although Sweden hasnine reactors in operation and gets over30 percent of its electricity from nuclearpower, only two plants remain undercotistruction.45

The nuclea: power programs of theSoviet Union and Eastern Europe are al-most completely independent of thosein the West, but they have followed asurprisingly parallel course. Construc-

1 4 4

tion of plants in the Soviet Union beganin earnest in the early seventies, and thenation's nuclear capacity grew from I,-600 megawatts in 1970 to 6,200 mega-watts in 1975 and to 17,500 megawatts(at 29 plants) in 1983. Nuclear power iscompletely run and controlled by thegovernment and the Communist party,which have a tradition of supportingelectrification as a foundation of themodern economy. State-owned compa-nies design and build the plants, andgovernment officials determine in theirFive-Year Plans how many reactors willbe financed."

The Soviet Union obtained half asmuch electricity from its nuclear plantsin 1983 as was expected a decade ago,and the rest of Eastern Europe hasmissed its targets by similar margins.Nuclear power is nonetheless becomingan increasingly important energy sourcethroughout the Eastern bloc, alreadysupplying 6 percent of the SovietUnion's electricity. 12 percent of EastGermany's, and 18 percent of Bulgaria's.Official projections call for reactors tosupply close to a third ,,f the region'selectricity by 1990, which would requireat least a tripling of nuclear capacity 47

In the past several years the Soviet nu-clear program has concentrated onbuilding the Atommash plant, designedto turnout as many as eight standardizednuclear reactors each year. This un-precedented effort at standardizationshould in theory help cut project leadtimes and reduce costs. It is also uniquein that it is part ofan internationally inte-grated nuclear program in which com-ponents made in various East Europeanfacilities will be used in each plant. Thelarge Skoda facility in Czechoslovakiaproduces turbines, generators, pumps,and pipelines. Plants in Hungary, Bul-garia, East Germany. and Poland are alsoin ilved. It is a strategy that should bemore efficient than having each nationbuild its own plants from the ground up.

Reassessing the Economics of Nuclear Power (129)

As with much of the Soviet economy,the nuclear program is kept under tightwraps. Published information accentu-ates successes and downplays problems.Many examples have nonethelessemerged of technical and organizationaldifficulties that have slowed develop-ment. including labor-managementproblems and delays caused by buildersand suppliers. The nuclear targets in thecurrent Five-Year Plan are reportedlybeing missed by more than 6,000 mega-watts. The Atommash facility itself is atleast two to three years behind scheduleand was the site of a major accident inmid-1983.4$

Substantial cost overruns on the coun-try's nuclear plants are conceded by So-viet Luthorities although there is no evi-deace that these have had a direct effecton the overall program, which continuesto enjoy ample political support andproceeds as rapidly as various technicaland management difficulties permit. Thetrue test of Eastern Europe's nuclearpower programs almost certainly liesahead, since the scale of the efforts andthe associated financial and technicalrisks are growing rapidly. Only time willtell whether the Soviet approach of mas-sive centralization and the absence ofpolitical opposition and financial checkscan lead to safe nuclear plants at a rea-sonable cost.

Japan has one of the largest nucleardevelopmen, programs in the worldtoday. Despite the painful legacy of theatomic bomb and considerable publicfear of radiation, the government hasmade nuclear power the cornerstone ofits energy policies in the last decade.With 117 million people squeezed intoan area the size of California and withfour - fifths of the country's energy sup-plies currently imported, nuclear poweris viewed as the only means of rapidlyenhancing the country's security. Japanhas 25 nuclear plants in operation, sup-plying 16 percent of the country's elec-

tricky, and another 13 are under way.The government has ambitious plans toexpand nuclear capacity sixfold by theend of the century, at which point itwould provide approximately half thecountry's electricity.*

The first nuclear plants in Japan wereessentially American-designed reactorslicensed from overseas corporations.Major research efforts in recent yearshave tried to establish an indigenous nu-clear technology and industry. a processthat is now largely complete. In fact.Japan is now considered a leader in reac-tor technology and has taken the initia-tive in joint ventures with American andWest German companies to design anadvanced light-water reactor. As in otherindustries, Japanese companies appearto be positioning themselves to competein the nuclear export market in case itrevives in the years ahead.

Yet the continued development of nu-clear power in Japan is not necessarilyassured: Political opposition is growingas the number of communities affectedby plants increases. Because it is a smallcountry with one of the world's highestpopulation densities, it is inevitable thatnuclear plants are built in somebody's"backyard," often the site of a valuablefishery or beach resort. The accidentalrelease of radiation from at least one nu-clear plant has aroused enormous con-cern. Also at issue are the frequency ofearthquakes, which could severely dam-age nuclear plants in virtually all parts ofJapan. and nuclear waste disposal, aproblem that will be particularly difficultto resolve in such a populous country.50

Japan, like other industrial countries,has failed to meet its early nuclear goals.The target for 1995 has already been re-duced by 13.000 megawatts and thereare indications that the recent recessionwill delay the itudear program further.51Cost overruns have been a concern toJapan's nuclear managers but have notyet forced a wholesale reevaluation of

145

tip) State of the WorldI984

the country's nuclear goals. Anotherconcern is that many Japanese plantshave shut down frequently for repairs.Yet the country's nuclear manufacturers,its privately owned utilities, and its en-ergy officials are determined to forgeahead. The pace at which they do thiswill probably be determined largely bythe operating and safety records of theplants and by their success in dealingwith the waste disposal problem.

NUCLEAR POWER IN THETHIRD WORLD

During the sixties and seventies, devel-oping countries had some of the bright-est hopes for nuclear power. whichThird World leaders viewed as a way toboost national prestige and reduce crip-pling oil import bills, Industrial counts ygovernments dispatched experts to pro-mote the economic merits of nuclearpower. In the early seventies, the Inter-national Atomic Energy Agency (IAEA)projected that developing countrieswould have 550.000 megawatts of nu-clear capacity by the end of the century40 percent more than worldwide oper-ating and planned nuclear capacity in1983.52

By mid-1983 six developing countriesArgentina. India, Pakistan, SouthAfrica, South Korea, and Taiwanhad atotal of 13 operating nuclear plants.Three other countries are buildingplants and several are considering pro-grams. Still, the Third World representsjust 6 percent of the total worldwidecommitment to nuclear pOwer. Andsince the mid-seventies the nuclear plansof these developing countries have beensubstantially reduced.ss

A key obstacle to nuclear developmentis the small size of electricity grids in

Third World countries. If a single powerplant provides more than 15 percent ofa grid's capacity, the whole system will`crash" if that facility is shut down.Using these figures, the IAEA estimatesthat only India, Pakistan, South Korea,and Taiwan have grids large enough toinstall a conventional 1.000-megawattnuclear power plant. Nuclear manufac-turers have responded by proposing"mini-reactors" in the range of 100-500megawatts. But none is ready yet com-mercially. The estimated per-kilowattconstruction cost for a plant of 200megawatts is more than twice that of aI,000-megawatt plant, making themeven less attractive economically.s4

A deteriorating world economy since1980 has also led to a significant trim-ming of the Third World's most activenuclear power programs. The capital in-tensity of nuclear power plants makesthem a burden to debt-strapped devel-oping countries, particularly since muchof the money must be spent abroad,draining scarce foreign exchange. Sub-stituting nuclear import bills for oil im-port charges is not seen by most ThirdWorld leaders as much of a gain.

The "miracle economies" of the FarEast have made the largest Third Worldcommitments thus far. Rapid growthand sizable electricity grids in countriessuch as South Korea and Taiwan explainwhy they are likely to have over half ofthe Third World's nuclear capacity by1990. Taiwan, clinging to an aggressivenuclear expansion program begun in theseventies, has four operating plants andtwo under construction. The pace slack-ened in 1982, however, when Taiwan de-ferred several reactors indefinitely be-cause of economic constraints and aslowdown in electricity growth. SouthKorea has two operating plants andseven being built, but it too has decidedagainst new orders in the early eighties.Leaders in these countries are stronglycommitted to nuclear power, but a major

146

Ileasseistrig the Eonorows of Kuclear Power (131)

improvement in economic conditions isnow a prerequisite to building additionalplants.55

The Philippines once had ambitiousplans for nuclear power. but the coun-try's first plant, sited near an earthquakefault. suffered major delays and costoverruns while the seismic design wasbolstered. Plans for additional ones havebeen scrapped. China has no nuclearplants. but some of the leaders in Beijingappear quite interested in this energysource. Capital requirements have madethem cautious about making major cotn-mitments so far. however, and the coun-try has only one small nuclear plant onorder as of 1983.55

India has the broadest range of nu-dear technology and expertise of anyThird World country. lts program islargely homegrown and much more in-dependent than those of other develop-ing nations. Four small plants arc oper-ating and another six are underconstruction. India realistically expectsto obtain 10 percent of its electricityfrom nuclear power by the nineties. Theearly hopes of the country's nuclearscientists for this source of energy havenot materialized. however. The plantsproved to be expensive and have pooroperating records. Additional orders arenot foreseen in the near future."

Among the Middle Eastern countriesthat once had ambitious plans for nu-clear power are Egypt, Iran, and Iraq.Each has seen a combination of eco-nomic and political problems seriouslyjeopardize its program. Iran's Islamicrevolution in 1979 killed an ambitiousand costly effort aimed at installing23.000 megawatts of nuclear capacity by1994. Even before the revolution, how-ever, critics questioned the size and eco-nomic viability of the Iranian program.Iraq's nuclear program came to a halt in1981 when Israeli warplanes destroyedthe research reactor that was its center-piece. Egypt also considered building

nuclear plants in the eighties. but itsefforts are now on hold.58

Latin America was a booming marketfor nuclear power in the seventies, but ittoo has fallen on hard times. Argentinahas had a small plant operating since theearly seventies and two more are beingbuilt. Wrapped in the cloak of national-ism. Argentina's nuclear program hasenjoyed strong government support,and the country hopes to have six oper-ating plants by the end of the century.Crippling debt problems. however, havecast doubt on these goals. and anythingbeyond the two now being built is un-likely.59

Substituting nuclear import billsfor oil import charges is not seenby most Third World leaders asmuch of a gain.

Brazil, the world's sixth most popu-lous country. has one plant completeand two under construction. The coun-try planned to have eight plants operat-ing by the early nineties, largely relyingon West German technology, but majortechnical problems and a lack of capitalhave rendered these goals meaningless.Brazil will be lucky to complete the twonow being worked on. Mexico was a late-comer to nuclear power. but as oil reve-nues soared in 1979 and 1980, the coun-try's leaders announced plans to buildseven plants during this decade. Todaythat vision has been obliterated by thecountry's debt crsis.6°

Current plans indicate that develop-ing countries will have at most 20.000megawatts of nuclear capacity by 1990.which is only one-seventh as much as theIAEA had projected in the early seven-ties." Yet even these numbers overratethe economic viability of nuclear power

147

(1321 State of the World-1984

in developing countries. All the nuclearsales in the Third World so far were sub-sidized by industrial country govern-ments or manufacturers. The day whennuclear plants are sufficiently cost-effec-tive that developing countries will buythem at the full price is far off indeed.

Beyond these problems lies the morefundamental question of whether nu-clear power is a wise use of scarce re-sources for a developing country. Nu-clear power creates fewer jobs andrequires more dependence on foreigncompanies and governments than doesalmost any other investment a ThirdWorld nation can make. It is also likely toserve a small minority who use electricitywhile bypassing the majority, who relyon fuelwood and charcoal. Investing inrural electrification using small-scale re-newable energy sources or improvingthe efficiency of wood cookstoves wouldprovide far greater benefits.

Nuclear power was greatly oversold inthe Third World. Humanitarian andprofit-seeking motives became con-fused, and projects were pushed that hadlittle hope of being economical. Most na-tions would in fact benefit if any projectsnot yet built were swiftly canceled. Andbeyond the economic issue is the grow-ing realization that nuclear power plainsare inviting targets for military and ter-

:st attacks in politically unstable re-,.;: .I1S.

NUCLEAR POWER'S FUTURE

Worldwide, nuclear power developmenthangs by a much thinner thread thanmost policymakers yet realize. The glob-al commitment to building nuclearpower plants has declined by 31,000megawatts since 1978, as major cancella-tions in the United States were not offsetby the more modest orders in some

148

otlwr nations. FurthPr declines in thenext few ;ears are virtually certain sincefew orders are expected. and many ofthe 20-30 plants not yet under construc-tion or on which work has been stoppedare candidates for cancellation.. The usu-ally optimistic Nuclear Energy Agency ofthe OECD concluded in 1982 that,"There is some risk that the nuclear in-dustry will not remain commercially via-ble in a climate of uncertain and variablemarkets." Markets of any kind arebecoming rare indeed for the nuclear in-dustry.'!

Hard, cold economics is now doing tonuclear power what thousands of hot-blooded demonstrators never could. It isslowly, painfully shutting down theworld's nuclear industries. The onlycountries in which development is pro-ceeding at close to the pace planned adecade ago are those where there is nosemblance of a market test and wherenuclear power is pushed single-mind-edly by a strong central government. Pri-vate investors who have a choice andwho must bear the financial responsibil-ity for their decisions are steering clearof nuclear power.

Important additional costs may fur-ther tip the economic scales. The dis-posal of nuclear wastes and decommis-sioning of old plants are criticalproblems that have yet to be effectivelyresolved in any country. Each presentsenormous health and safety concernsthat could affect societies for genera-tions. Providing remedies will inevitablyadd to the cost of nuclear power. So farwaste disposal and decommissioning are"uncounted costs" and their potentialsize can only be guessed. Official figuresgenerally show the disposal and decom-missioning adding 5-10 percent to thecost of nuclear power though unofficialestimates range up to an additional 30percent or more. The degree of concernover these issues is evident in California:The state legislature there has on eco-

Iternsesung the Economics of Nuclear Power

nomic grounds banned the building ofnuclear plants until there is a nationalprogram for waste disposa1.65

Some would argue that even if nuclearpower is expensive it is still essential asa replacement for imported oil. Al-though it is true that nuclear power hashelped lower oil imports in some nationsparticularly France and Japaninmost countries its contribution has beennegligible. dwarfed by increased use ofcoal and energy efficiency. In the UnitedStates oil imports have fallen 50 percentsince 1978. but nuclear power genera-tion has risen only 5 percent. Today asmall and shrinking fraction of theworld's oil is used to generate electricity.,and the oil versus nuclear equation islargely mo01.64

Cold economics is now doing tonuclear power what thousands ofhot-blooded demonstrators nevercould.

The choice between coal and nuclearpower. as usually posed. is not an attrac-tive one. Coal-caused air pollution hassteadily increased in many countries,producing new evidence of health andenvironmental damage. Air pollution isshortening the lives of millions of peo-ple, particularly in developing countriesthat cannot afford pollution controls.Recently, acid rain and the threat of cli-mate change through the greenhouseeffect were added to the list of coal-related ills and appear much less open tosimple technical fixes.

The world's energy options. however.are not limited to a choice between nuclear power and coal. The biggestchange in the utility industry in recentyears has been the new role of"end-use"energy efficiency as an alternative to new

(133)

power plants of any kind. By increasingthe amount of light delivered by a lightbulb or the work performed by an indus-trial motor for every kilowatt-hour ofelectricity used, the same energy ser-vices are gained at less than it would costwith a new generating plant.65

Many of today's efficiency investmentssave energy at a cost of between lv and2v per kilowatt-hour, which is one-tenthto one-fifth the cost of electricity from anew coal or nuclear plant. Utilities arebeginning to take advantage of such bar-gains. in pan because regulators are al-lowing them to include in the rate basethe funds invested, say, in home insula-tion or a more efficient air conditioner,just as they do investments in new-powerplants. A 1983 survey of 120 U.S. utili-ties by the Investor Responsibility Re-search Center found that 75 percenthave formal energy efficiency programs.Collectively the utilities surveyed esti-mate that improved efficiency will re-duce their need for new generating ca-pacity by 30,000 megawatts over thenext decade at a cost of $6.6 billion. orless than one-sixth the cost of equivalentpower from a new nuclear plant 66

These fundamental changes in theeconomics of electricity are greatly ex-panding the list °futilities' options. Thisbroader context is likely to determinenuclear power's future. Donald Jordan,president of the Zdison Electric Insti-tute, said in 1983: "The huge construc-tion program we face has damaged ourindustry and our company. The bestthing for us would be no growth." En-ergy conservation programs have caughton more slowly outside the UnitedStates, but many are now beginning.Throughout virtually the entire indus-trial world electricity growth rates haveslipped from the 6-8 percent annualrates of the early sevemief to between 1and 4 percent today. In much of north-ern Europe, electricity use could actuallydedine.67

149

(IP) State of the 11'orld-1984

When new generating capacity isneeded, utilities will have many moreoptions than when they last orderedplants. Promising renewable sources ofelectricity include small-scale hydro-power, geothermal energy, biomass en-ergy, wind power, and photovoltaic solarenergy. In addition, cogenerationthecombined production of heat and poweris a rapidly growing alternative to cen-tral power plants. The cost of these en-ergy sources today ranges from justbelow to substantially higher than thecost of power from new coal or nuclearplants. But the cost of the new sources isdeclining while those of coal and nuclearare still rising. (See Table 74.) In addi-tion, many alternative energy projectscan be built on almost any scale andplans quickly modified if demand shifts,an important advantage given utilityforecasters' poor record for projec-tions."

Nuclear power is going to find it hardto stay alive in the emerging competitiveeconomic climate. In the United Statesmost utilities now state openly that theydo not even consider it in their plans fornew generating capacity for the nextdecade. In other countries the strength

Table 7-3. Estimated Cost of ElectricityFrom New Plants, 1983, With Projections

for 1990 (in 1982 dollars)

Elnerp Source 1983 1990

(cents perkilowatthour)

Nuclear 10-12 14-16Coal 5-7 8-10

Small Hydropower 8-10 10-12Cogeneration 4-6 4-6Biomass 8-15 7-10Wind Power 15-20 6-10Photovoltaics 50-100 10-20

Energy Efficiency 1-2 3-5socitca worldwatch Institute.

of nuclear development appears to de-cline in direct proportion to the degreeof responsibility and risk the private sec-tor is required to assume.

If an overriding national goal is theexpansion of nuclear power, a centrallyplanned energy program appears best.However, providing energy services atthe least cost and ensuring adequatecapital for non-energy investments makea centralized commitment to nuclearpower much less attractive. Even rela-tively successful programs are encoun-tering cost overruns that cannot beentirely short-circuited via central plan-ning. Many will pay for their "success"with high electricity rates and scarce cap-ital for years to come.

The broad range of alternatives avail-able and the pace at which the utility in-dustry is changing make a balanced ap-proach more important thzn ever. Ade-quate power at the lowest feasible priceis the most sensible overall goal, with aninternal accounting of the environmen-tal costs associated with each energysource. If nuclear power does not passthis market test, which it may not, it willbe replaced by more-appropriate energysources.

Nuclear power's economic problemsare not about to disappear. Costs con-tinue to increase everywhere and highinterest rates and tight capital marketsare likely to remain, even with a vigorouseconomic recovery. Arguments over theeconomics of nuclear power are boundto grow more heated as cost increasesbegin to affect electricity consumers di-rectly and as nuclear industries, starvedfor new orders, pressure for more sup-port.

The question now is not whether tomake a few small adjustments to encour-age a thriving industry, but whether tointroduce fundamental institutionalchanges and new economic subsidies toprop up a dying business. Leaders inmany countries will be tempted to mud-

Ileastetstag the Economics of Nuclear Power (135)

die through, making one decision at atime and so wading gradually into afinancial quagmire. This could b. themost costly approach of all. Many utili-ties in the United States have dung tonuclear projects long after their eco-nomic rationales had turned to dust. Inthe end, the plants were canceled, butoften several }ears and hundreds of mil-lions of dollars later than would havebeen prudent.

National leaders continue to be inesmerited by the once-great hopes placed

in nuclear power and fail to see clearlythe economic burden it has become. Abasic business principle holds thatmoney-losing enterprises should not becontinued in an attempt to recover earlylosses if more promising investment op-portunities are available. The th - is athand to decide whether nuclear powerprograms have reached this point. Manynations would benefit by cutting theirlosses and moving on to more-produc-tive endeavors.

151

8

Developing

Renewable EnergyChristopher Flavin

Sandra &lel

Efforts to develop renewable energysources have unfolded at an unprece-dented scale and pace since the 1973 oilembargo. In the early seventies, renew-able energy was in a much weaker posi-tion than synthetic fuels, nuclearbreeder reactors, and fusion power, en-ergy sources in which great hope hadbeen placed and on which much govern-ment funding had been lavished. Themany disappointments and delays plagu-ing these heavily funded technologiessince the late seventies are warply con-trasted by rapid progress made in devel-oping a wide range of renewable energysources.

Renewable energy development wasstimulated by major new government re-search and development (R&D) pro-grams in the mid-seventies, which were

Many of the issues in this chapter are discussed ingreater detail in Dantei Deudney and ChristopherFlavin, Renewable Energy. The Power to Choose(NewYork: W.W. Norton & Co.. 1988).

152

soon joined by research efforts in univer-sity and corporate laboratories. R&Dprograms covered everything from ge-netic research aimed at developing bet-ter fuel-producing crops to large solardemonstration projects built by privatecompanies with government funding.Not all the projects met their objectives,but the successes far outweighed thefail-ures and helped pave the way for futureprogress.

In the development of any new tech-nology there is a natural evolutiondriven by economic and political devel-opments as well as technical change,New inventions often languish in thelab-oratory for years before their commer-cial potential is recognized, capitalraised, and markets developed. Severalrenewable energy sources are now cross-ing this critical threshold, entering astage of explosive growth that will dwarfpast progress. The momentum estab-lished in the past decade appears suth-

Developing Renewable Energy (137)

cient to overcome the negative effects ofstagnant oil prices, high interest rates,and diminished government support.

Renewable energy sources provideapproximately 18 percent of theworld's energy, mainly in the formof hydropower and wood fuel.

Since 1980. nrivate companies havedecisively takt the lead from govern-ments in the development of renewableenergy. According to International En-ergy Agency data for 17 industrial coun-tries, governments spent $1.2 billion onrenewahle energy R&D in 1981 and in-dustry spent $1.4 billion; total annualprivate investment in the actual develop-ment of renewable energy in these coun-tries probably approached $10 billion in1983.1 Surprisingly, investments roseconsistently during the world% ide reces-sion of the early eighties. With the gov-ernment spending cutbacks, the privatesector is now leading the way in renew-able energy development.

Today. renewable energy sources pro-vide approximately 18 percent of theworld's energy. mainly in the form ofhydropower and wood fuel. That figurehas risen only slightly since 1973. butmore rapid growth is likely in the yearsahead. The list of itnport ant renewableenergy sources will grow to a half-dozenor more. Although none of these will bea cheap panacea, eliminating the' needfor oil overnight. collectively they ap-pear capable of meeting tnany of themodest additional energy needs that willarise during the next decade. The re-newable energy sources discussed in thischapterwind power. wood fuel. geo-thermal energy. and photovoltaic solarcells--are among the energy sources inwhich recent progress has been substan-

tial. Other major sources. such as hydro-power, methane generators. solar waterheaters, and energy crops. will be dealtwith in this report in subsequent years.

FARMING THE WIND

Wind power has moved to the forefrontof the renewable energy scene in somecountries in the past few years.2 Al-though simple wind pumps have beenusr 3 for over a millenntenn to lift waterfor agricultural and household uses.wind power development in the earlyeighties has been dominated by a newform of wind power: centralized wind-electric systems operated by or for utili-ties. "Wind farms''clusterings of turhires connected to the electric gridarenow generating powet commercially inCalifornia and a few other areas.

Harnessing the wind to generate elec-tricity dates hack to 1890. and wind gen-erators were widely used to electrifyfarms in the early part of the century.About 20.000 wind whines are usedtoday at fire lookouts and remote air-fields and on isolated ranches adc tstal buoys, When energy priceshegan rising in the seventies. the windpower industry made only fitful progressat first. Gradually the technology im-proved with the help of government-funded research and development.Aerospace engineers worked to developwind machines with blades as long as ajumbo jet's wings and with generatingcapacities as high as 5.000 kilowatts.enough to supply power to over 1.000modern homes.

At least eight giant wind machineshave heen erected in the United States..and others have gone up in Canada.Denmark. the Netherlands. the SovietUnion, Sweden. the United Kingdom,and West Germany. Success in these

1 ,53

1138i Stat, of the World-1984

ellorts has been 'nixed. Some wind ma-chines have blown over and some gener-ators have burned outthe usual prob-lems of a new technologyand effortsarc being made to reduce the cost of thewind turbines and improve thei. : iabtl-ity. Employing aerospace designs andcomputer controls. these giant machinesrequire world-class engineering. It willbe several years before they are a viableconinsercial technology."

Meanwhile, business interest in windpower blo.ssomed. A 1981 survey foundthat 110 U.S. utilities had wind energyresearch programs, and many have in-stalled experimental machines. 1 heworld's first commercial wer i farmbegat; generating power in New Hamp-shir in 1981, and the first municipalwind farm was installed in Livingston,Montana, in 1982.5

Since 1982, however, all these effortshave been overshadowed by those inCalifornia. Blessed with mountainpasses that are ideal wind fiirm sites, thisstate is far and away me world's windfarm pioneer. Beginning in the late sev-enties, the state governmem conductedthorough wind resource assessments,offered generous wind energy :ax cred-its, and required utilities to buy powerfrom wind farms at a competitive price.Rapidly rising electricity prices provideadded incentive m a state where utilitiesstill depend heavily on oil- and gas-firedpower generation.

The result was a wind farm boom thatsome have likened to the California goldrtish of 1849. Starting almost fromsnatch. developers installed 900 ma-chines at 20 separate locations in 1982.Surveys indicate that 4,613 wind tur-bines with a total generating capacity of300 megawatts will have been installedby the end of 1983, enough to meet theneeds of over 30,000 households. (SeeTable 8 -1.) Three-quarters of them we einstalled in 1983 alone. Wind farms nowin the planning stage that should be

Table 8.1. California; CommercialWind farms ;,stalled, by Location,

by End of 1983'

location MachinesGenerating

Capacity

Manion' Pass(number)

2.143

(megawatts)

142

Tehachapi 1 637 102

MountainsSan Gorgonio 603 34

Pass

14fnjave 150 18

Salinas Valley 80 4

Total 4.613 300

'Preliminary estimate.soritcrs. C.1;tfornta Energ) Commission. "largeCalifornia Wind Projects Installed in 1981 and1982." and "large-Scale California Wind ProjectsPlanned for 1983.- Sacramento. Calif . unimb-lashed. 198

complete by the late eighties include 8,-600 wind machines with a generating ca-pacity of about 1,500 megawatts.' TheCalifornia Energy Commission's goal isfor the state to have 4,000 megawattsinstalled by the end of the century,enough to supply 8 percent of the state'selectricity.

Much of the early work in developingwind farms in California is being carriedout by small innovative firms formedspecifically to tap this power source. Thecompanies have contracts with utilitiesto supply wind-generated electricity atthe same price it would cost the utility toget the power from another source. TheU.S. Windpower Company, one of themost successful developers, is one-thirdof the way toward its goal of providing60 megawatts of generating capacity forthe Pacific Gas and Electric Company.The small wind energy entrepreneurstypically raise their own financingthrough limited partnerships and leasethe land on which the machines are con-structed. Aided by generous federal andstate tax incentives, such firms can invest

1.54

Developing Renewable bulgy

in tie.. power solaces Mai mime. willtv,i develop on their own. For the utili-ties. the arrangement is an almost risk-free way of adding a new power source.For the investors* a healthy tax ciedii isavailable, along with revenues from theelectricity sales. As die technologies improve and wind-generated etc.( (nc ti.becomes cost-competitne with comet:-111mA sourcm the ir,.( credits wilt nolonger be tie( essars.7

California's wind farms have devel-oped so quickly that the wital machineindustry is still catching up Since thelarge machines are not commercial!yready. developers have relied on medi-um-sited mimic. with generating ca-pacities of between 30 and 100 kilowatts.So rapid is the growth that more tur-[inv.% were bath in the United States in1982 and 1983 than in the previous tenyear: combined. Imported machine..primarily from the Netherlands and Bel-gium, filled the gap and (-urgently supply10 percent of California's wind powermarket Tbe state is serving as a majorstimulus to the wind turbine industrywoildwide.9

Wind farms now in the planningstage include 8,600 wied machineswith a generating capacity of about1,500 megawatts.

Modern wind turbines include the lat-est in transmissions, i omputer controls.and s.nthetic materials. 'Fite wind farmshave not been without technical prob-lems, however. Man. machines have hadto be shut down temporarily idt repairs,and important lessons continue to belearned? The most basic one is that asimple, rugged wind machine is likely tohold up the best, and some of the sophis-ticated, efficient designs have been aban-

(139)

dotted. Laige-scalc assembly-line pro-duction of wind machines should begatsoon. putting wind power about wherethe automobile industry was whenHem. Ford introduced the Model T.The resulting machines are likely to bemore reliable and less expensive. Gradu-al!y develop rs are ordering larger windmachines and 't may be only a few more.ears before trulti-megawatt machinesare used coinmeirially. Preliminary con-tracts have been signed to set up suchwind farms.

The econo:.nc verdi.1 on wind farms isin. If well-designed machines are placedat windy sites.. electricity can already begenerated for as little as 100 per kilo-watt-hour. In parts of 17.alifornia. theU.S. Midwest, northern Europe. andmany developing countries where windspeeds average at least 12 miles per hourand where oil-generated electricity iscommon. wind farms are close to beingeconomically viable now. Studies inEurope and the United States indicatethat later generations of mass-producedmachines will be able to produce elec-tricity at 3-7e per kilowatt-hour, makingthem commercially viable without spe-cial tax credits. By the nineties windfarms are likely to have an economic ad-vantage aver coal and nuclear powerplants ir. many parts of the world. In themeantime, work is needed to further im-prove mantle performance and reliabil-ity.")

The environmental effects of wind ma-chines are a potential constraint on thefuture of this renewable energy source.'[he availability of inexpensive land farfrom housing developments is key towind farm acceptability. A "farm" gener-ating power equal to a 1,000-megawattpower plant would cover approximately82 square kilometers of land. MeetingCalifornia's goal of providing 8 percentof the state's generating capacity withwind farms requires the placement of he-tween 10,000 and 100.000 machines on

155

t Lot State of the World-1984

approximately 615 squire kilometers.Yet this area is just two-tenths of 1 per-cent of the state's land. Based on suchcalculations. countries with ample windshould be able to get 10-25 percent oftheir electricity from this resource with-out infringing on land needed for agri-culture or housing.' 1

Noise and safety are additional envi-ronmental concerns. Annoying soundsand inaudible vibrations have causedproblems with sonic experimental windmachines. Residents living near Al-taniont Pass in California, site of theworld's largest projects, complainedabout the incessant "swooshing" sound.and their land finally had to be pur-chased by wind power developers. In1983, environmentalists fought a pro-posed wind farm to be located near thescenic northern California coast, Properland use planning could prevent theseproblems. Wind farms clearly should beshed discriminately. and there are plentyof good locations where conflicts shouldnot arise.'2

California's wind farms have alreadygained worldwide attention and arelikely to stimulate similar projects inother countries that can benefit from thetechnical and institutional lessons ofthese pioneers. In the Netherlands. thenational electricity association is devel-oping a 10-megawatt experimental farmand plans to be generating 7 percent ofthe country's electricity with wind powerin the year 2000. Experimental windfarms have also been started in Denmarkand Sweden, and several other northernEuropean countries have similar plans.One of the most innovative is a Britishplan to create offshore "farms" in thewindy North Sea, supported by plat-forms anchored to the sea floor."

Government support is a prerequisitefor the successful early development ofwind power, The advances made in Cali-fornia would not have been possiblewithout tax credits. By reducing the in-

156

vestment risk, tax incentives stimulatethe early stages of wind power develop-ment. So far, most government supporthas been funneled into R&D programs,which are necessary but not sufficient tocreate a viable wind farm industry. Windresource surveys are also essential.Those done in California, for example,revealed an energy source larger thananticipated and were the catalyst for thestate's wind farm boom,

Today economics and politicsmorethan resource or technical limitsareconstraining wind power development.In California, the expected boom in1983 was slightly restrained by delays inextending the state's renewable energytax credit. Oil price declines and the re-sultant lowering of the "buy-back rate"that wind developers receive from utili-ties have also slowed the progress. Sincemid-1983 wind farming efforts have ac-celerated, however, and several thou-sand machines should be installed in thenext few years. Wind power is shapingup to be a majiir energy success story ofthe eighties.

THE RESURGENCE OF WOOD

India and the United States, far apart onthe economic spectrum, have ,t leastone thing in common: They now burnapproximately equal amounts of fuel-wood. Yet in the United States the ISOmillion tons of fuelwood used annuallyrepresents only 3 percent of energy con-sumption, whereas in India this sameamount supplies one-fourth the country's energy.14

These two countries highlight a strik-ing dichotomy in world fuelwood use:overuse in the developing world, wherefuelwood is a necessity in ever shortersupply, and great underuse in the indus-trial world, where despite its abundance

Developing Renewable Energy

wood was largely supplanted by otherenergy sources in the early twentiethcentury. For most Third World resi-dents, fuelwood is the only viable cook-ing fuel. Oyer 100 million of these peo-ple cannot get enough wood to cooktheir food and over a billion are meetingfuel needs only by men tilting and dep-!cling their wood resources. (As dis-cussed in Chapter 5, massive tree plant-ing is the only hope of averting thisgrowing Third World energy crisis overthe coming decades.)

Vet in many industrial countries fuel-wood use has only scratched the surface01 itgimential. Millions of tons of woodwaste and low-quality timber go unusedeach year in the forest-rich countries ofNorth Americ,i and Europe. Now. after acentury-long decline when cheap, abun-dant fossil fuels dominated, wood is edg-ing its way back into the energy budgetsof industrial nationi.

Sweden, with one of the highest oilimports per capita in the world, hasgiven wood a prominent roIe in its plansfor a inure self- sufficient energy future.Aiming to halve oil consumption by1990, Sweden plans to get 15 times asmuch energy from fuehvood, woodchips, and forest residues as it did in1980. Adding energy from pulp-millwastes should bring wood's projected1990 cont ribution 10 12 percent of totalenergy supplies, nearly half oil's share. 11the government's plans to reap energyfrom tree plantations are even modestlysuccessful. wood will replace oil as theleading energy source before the end ofthe century .1'1 Finland, too, is investigat-ing "energy forests ". -the planting ofwillow and other fast-growing, noncom-mercial species mainly on marginallands. Estimating that wood waste couldreplace up to 30 percent of its oil im-ports. Finland has resolved to strive for40 percent energy self-sufficiency by1990.16

Canada derives 3.5 percent of its pri-

(141)

mary energy from wood, nearly all ofwhich is used in the forest products in-dustry. Burning wood for space heatinghas been limited to about 3 percent ofCanadian homes, although the residen-tial wood market is much stronger insome eastern provinces where woodsupplies are nearer to towns. On PrinceEdward Island. Canada's smallest prov-ince and the one most heavily dependenton oil. about half the rural homes arenow heated with wood. The govern-ment's Forest Industries Renewable En-ergy Program, begun in 1978 to encour-age the wood products industry toreplace fossil fuels with wood wastes,had such a successful first three yearsthat it was extended through 1986 andits budget was tripled to $288 million.Canada's $30-million wood energy re-search program is focused on displacing10 percent of fossil fuel use by the year2000.17

India and the United States nowburn approximately equal amountsof fuelwood.

In the United Stales, the decisions ofmillions of homeowners and scores ofcompanies are sparking wood energy'srevival. After falling from 75 percent in1870 to 2 percent in 1973, wood's share'If national energy use is now up to 3percent and climbing, In 1982, indus-tries accounted for 60 percent of woodenergy consumption: homes and smallbusinesses burned the rest. Although in-dustrial wood energy consumption hasbeen rising for decades. it is the use byhomeowners that has changed dramati-cally. Since 1973 wood energy use in theresidential sector has more than dou-Wed.'s Annual sales of residential woodstoves increased ninefold between 1972and 1979 and two million stoves for

157

(:42) State of the World-1984

home heating were purchased in 198ialone." Americans collectively burnedover 48 million tons of wood in theirhomes in 1981equal in end-use heat-ing value to nearly 100 million barrels ofoil." (See Figure 8.1.)

a

Between 1973 and 1981, Vermontresidents halved consumption ofhome heating oil and tripled theirburning of wood.

Wood's reentry into the U.S. homebeating market is strongest where thefuel is abundant and where other energysources have risen greatly in price. Noregion hetter exemplifies this than NewEngland. where 80 percent of the land isforested and where the price of fuel oilthe most widely used home heatingfuelhas jumped 240 percent over thelast decade. Between 1973 and 1981,Vermont residents halved their con-sumption of home heating oil and tri-pled their burning of wood.2' (See Fig-ure 8-2.) In 1980 alone, $48-millionworth of petroleum was saved and, sincewood is a local energy source. its useincreased local employment and in-

MillionBarrels

100

80

60

40

1965 1970 19175 197;0 1985

Figure 8.1. U.S. Residential Wood Use (inEquivalent Barrels of Oil). 196541

-rntlionwrus25

1 1

1960 1970 1980 1985

Figure 8.2. Use of Oil and Wood for HoeneHeating in Vermont, 196041

come. Although the pace of fuel switch-ing no doubt will slacken over the com-ing years. if these general trends in oilconsumption and wood use continue,wood may rival oil as the states leadingresidential fuel within a decade.

Industrial use of fuelwood has longbeen dominated by the forest productsindustry., Recent progress towardgreater self-sufficiency in this energy-intensive industry is impressive. Bark,pulping wastes, and wood chips nowsupply about half the U.S. pulp andpaper industry's energyequal to about125 million barrels of oil annuallywhile the solid-wood products industry(making plywood, cabinets, pallets, andso forth) is now about 70 percent self-sufficient. Many of these companies aresupplying power to nearby communitiesand industries. The Scott Paper Com-pany cogenerates 30 megawatts at itsWestbrook, Maine, plant and sells thesurplus electricity to the local utility.Paper companies in Sweden are obtain-ing 60 percent of their energy fromwood residues; those in Canada, 45 per-cent. 'Mese figures should keep rising asmore firms find that extracting energyfrom their own waste matter makes eco-nomic sense."

bepeloinng Renewable Energy (1431

Wood fuel is now attracting other in-dustries as well. By late 1985, at least 8projects generating over 10 megawattsof electricity exclusively from wood willbe on fine in non-forest-products com-panies in the United States. (See Table8-2.) By the end of the decade this num-ber will easily exceed 25, Industrial boil-ers are being fired with scrap from fUrni-ture-makers, waste wood from pulpmills, residues from the forest, woodchips from land-clearing operations. aswell as harvests from private forests.Proctor and Gamble spent $30 million toconvert its large Staten Island, NewYork, plant from oil to wood in 1983 andexpects energy sayings of $3 million ayear. Dow Corning Corporation. a lead-ing tnamdm lure, of silicon products,began cogenerating electricity andsteam at its Midland. Michigan. plant inDecember 1982. Although the facilitycan burn wood, oil. natural gas. or coal(with modifications), wood is the eco-nomical choice for the eighties. DowCorning is meeting all its own energy

needs and selling between 1 and 2 mega-watts of electricity to Consumers Power,the area utility.23

Where conventional fuels are expen-sise and wood supplies abundant. elec-tric utilities are also finding fuelwood anattractive alternative. A subsidiary ofWashington Water Power Company isnearing completion of a 46-megawattwood-fueled plant in Kettle Falls that an-nually will burn about 450.000 tons ofwood waste from surrounding lumberChills. Vertnont's Burlington Electric De-partment, which already has retrofittedtwo 10-megawatt coal units to burnwood, plans to have a 50-megawattwood-fired boiler operating in early1984. The half-million tons of woodchips consumed annually will come fromprivately owned forests within 50 milesof the city. Ultrasystems, Inc.. of Califor-ina is pioneering the development ofsmall electric power plants to be run en-tirely on forest residues. Two plants thatwill tie into northern California's utilitygrid are slated for completion over the

Table 8-2. United States; Selected Plants Outside of Forest Products IndustryGenerating Electricity From Wood'

Capacity Wood Source Start-upProbe s t

Burlington Electric Dept.Burlington. Vermont

W.P EnergyKettle Falls. Washington

Dow CorningMidland, Michigan

Ploctor and GambleLong Beach. California

Uhrapower, Inc.Burnes. California

1.71trapower. Inc.Westwood. California

Proctor and GambleStaten Island. New York

(megawatts)

50.0

46.0

22.4

13.5

11.0

110

10.5

private foiestlandhat.% ems

mill residues

private forestlandharvests

industnal waste wood

forest residues

forest residues

industrial waste wood;wood chips

Spring 1984

Fall 1983

December 1982

June 1983

September 1984

September 1985

June 1983

'Not inducted arc utilities and miiwoic. blending wood with coalsoma: Perional cononimii anon% with math And indiotry ollictalt

159

State of Mr WorldI984

next two )ears and the company plans todevelop 20 of these plants nationwideover the next five years.24

Wood-fired electricity generation isalso being pursued in developing coun-tries. In the Philippines, the heartylegume tree lencaena (known there asthe ipil-ipil) has been planted on sonic15.000 hectares of shallow. infertile soilsto supply wood to power plants through-out the island nation. Several of the 17plants initially planned are nearing com-pletion and at least two were expel ted tobe operating by late 1983.. About 1,200hectares of letKaella are needed to sup-ply each 3-megawatt power plant withfuel on a sustainable basis. The trees areplanted and farmed by rural families,many of whom now have steady incomesfor the first time. Each hectare annuallyproduces wood equal in energy contentto 20-25 barrels of oilat one-fourththe price. With about six million hec-tares (20 percent) of the country's landarea now denuded, there is ample roomand reason to expand these planta-tions.gs

Wood's resurgence as an energysource is owed in large part to new tech-nologies of harvesting and processing itfor fuel. Mechanized whole-tree harvest-ing, unlike traditional logging, removesnot only the commercially valuable boleof the nee but its leaves and branches aswell. Residues formerly left as slash inthe forest are thus available for fuel. Injust minutes, whole-tree chippers canconvert virtually all parts of a tree intowood chips that can be easily tran-sported to a waiting wood-fired boiler.As shown by Proctor and Gamble's plantin Staten Island, no longer must a com-pany be surrounded by forests to fuel itsboilers with wood.

Also. in the last few )CaTS wood pelletshave increasingly moved from the re-search tab to the marketplace. The pat-ented pelletizing process yields bite-sited bits of wood (or other biomass)

that are denser, drier, and thus cheaperto transport than other wood fuels. Sinceconverting boilers from coal to pellets istypically quite easy, pellet-producingcompanies sec a large market ahead infueling industries, schools, hospitals,and other institutions, as well as in heat-ing homes. At least a dozen plants arenow making pellets in North America.BioSolar Research and Development inEugene, Oregon, and Shell-Canada arejointly building these plants in severalPacific Rim countries, expecting a siza-ble market where oil import bills arehigh.2'

No longer must a company be sur-rounded by forests to fuel its boil-ers with wood.

Burning wood for fuel is not alwaysenvironmentally benign. As demand forfuclwood continues to rise and emerg-ing technologies make logging of smalltracts and noncommercial wood moreeconomical, the character and health offorests may change. In the United States,more than half the commercial forestsare owned by nearly eight million privatelandowners. Many have never managedtheir forests for commercial purposesbut may soon have an incentive to do so.The 50-megawatt power plant in Burl-ington. for example. may double thewood harvest of northern Vermont. Fuelfor Dow Corning's Michigan plant willcome from private forests within 50-75miles.27

Foresters anticipate both benefits andproblems in this situation. On the onehand. selective thinning and removal ofold growth could increase the productiv-ity of private forests, something that for-esters have advocated for some time butthat private landowners had little incen-tive to do. Yet whole-tree harvesting

160

beveloping Renewable Energy

technologies will remove more biomassfrom the forest and will encourage moreclear-cutting. Leaves and twigs havehigh concentrations of nutrients that, ifleft in the forest, revitalize the soil.Removing too much biomass couldeventually cause declines in forest pro-ductivity. As the wood energy marketgrows, these potential effects must bemonitored carefully and limits may needto be set on wood removal from someforests.

Like most energy sources. fuelwood isnot without its pollution problems. Win-ter mornings in many wood-burning val-ley towns are now shrouded in a bluish-gray hate. Wood-stove emissionscontain a high percentage of organicmatter thought to be toxic and carcino-genic. Wood burning is now regulated inthe state of Oregon and in some townsin Colorado and Montana. In other areaswhere such pollution is worsening, regu-lations undoubtedly will be forthcom-ing. Catalytic converters effectively con-trol wood pollutants and recoup part oftheir $80-100 price tag by increasingefficiencies by 15-25 percent. Pollutioncontrols for industrial wood boilers gen-erally require a smaller capital invest-ment than a comparable coal plantwould. but costs are not insignificant.The electrostatic precipitator thatremoves virtually all particulates at DowComing's plant added 15-20 percent toconstruct ion cost S.28

Although wood is unlikely to regain aplace of dominance in the energy bud-gets of industrial countries, it is emerg-ing as an important component of therenewable energy picture in many re-gions. Neither the forest managementproblems nor the pollution control chal-lenges it poses are insurmountable. Be-fore the century is out. wood's contribu-tion to primary energy needs is likely toreach between 7 and 15 percent in sev-eral industrial countries, dependingupon the success of energy plantations

('45)

and the extent to which commercial for-ests come under more intensive manage-ment.

GEOTHERMAL ENERGY

DEVELOPMENT

Whereas most renewable fuel sourcesdraw upon the sun's energy, geothermalenergy comes directly from the earth'svast subsurface storehouse of heat. In-tense pressure and the decay of radioac-tive elements deep within the earth con-tinuously generate heat that escapesthrough hot springs, geysers, and vol-canoes. The world's geothermal richesinclude the area where the mid-Atlanticridge bisects Iceland, areas around theMediterranean, the Rift Valley in EastAfrica, and the "Ring of Fire" that ex-tends around the Pacific Basin. Yet evenoutside these places, which constituteabout 10 percent of the world's landmass, there are abundant lower-temper-ature geothermal deposits.29

For millennia people have flocked tohot springs, and by the ninth centuryIcelanders were using geothermal heatfor cooking. In the Middle Ages severalEuropean towns distributed naturallyhot water to heat homes. The 20 coun-tries tapping this source today for choresother than bathing cull the energy equiv-alent of 91 million barrels of oil eachyear. about half in the form of direct heatand half as electricity. Although not yeta major component of the global energybudget, this is enough direct heat tomeet the needs of over 2 million homesin a cold climate and sufficient electricityfor over 1.5 million model n homes."

Heating homes is the widest applica-tion of geothermal energy today. Sincethe turn of the century, the residents ofKlamath Falls. Oregon, have drilled

ip

(146) Stale of the World-1981

more than 400 wells to tap the 40-110° C water beneath their houses forspace- and domestic water-heating.Household wells there have exchangersthat transfer heat from the briny subter-ranean reservoir to the pure water cir-culating to the house. Using a heat ex-changer conserves the resource.minimizes corrosion. and skirts theproblem of wastewater disposal."

Where human settlements sit astridegeothermal resources, district heating isan unbeatable bargain. The most im-pressive example is Iceland, whose im-mense geothermal resources provideheat for 75 percent of the population. InReykjavik. the capital. nearly all the 112,-000 residents use heat from two geo-thermal fields under the city and fromanother field 15 kilometers away. Visi-tors to this frigid city in the thirties recallthe pall of coal and wood smoke thatengulfed it in winter. Today the air isclear. and heating homes costs one-fourth what it would if fuel oil wereused." France. Hungary. the SovietUnion, and the United States also havegeothermal district heating systems inplace.

Although geothermal technology hasadvanced far in recent decades, it is stillthe simplest uses that are the most popula r. Japan's 1.500 hot-spring resorts arevisited by 100 million people each year.for example. and require no drilling. lit-tle piping, and minimal capital. Yet itwould take five large conventionalpower plants to heat these baths. Inparts of Mexico, people wash clotheswith naturally hot water: some Thais andGuatemalans use it to boil vegetablesand make tea. The largest agriculturalapplication is greenhouse heating: InHungary. geothermal greenhousescover 70 hectares. while Italy saves$600.000 worth of fuel oil a year by geo-thermally heating several green-houses.33

This renewahle resource is also used

in industry. In northern Iceland a miner-al-processing plant uses it to remove themoisture from siliceous earth. With 30percent lower energy costs, the companynow pockets an extra $1.3 million annu-ally. At Brady's Hot Springs, Nevada, anonion dehydration plant using geother-mal energy is saving $300.000 per year,enough to motivate the company'smanagers to expand the original plantand build an additional one."

Converting geothermal heat to elec-tricity allows the captured energy to betransported to cities and factories farfrom its source. Areas with the high-tem-perature geothermal water or steamneeded for electricity generation arerarer than those suited for direct use.Even so, today over 130 geothermalpower plants with capacities of 0.5-120megawatts are operating in more than adozen countries, and the number isgrowing rapidly. (See Table 8.31 Collec-tively, these plants have a generating ca

Table 8.3. Worldwide GeothermalElectrical Generating Capacity, June 1983

TotalPower installed

Country Plants Capacity

United StatesPhilippinesItalyJapanMexicoNew Zealand

El SalvadorIcelandIndonesiaKenyaSoviet UnionChina

(number)

241441

81014

3

532I

10

Total 135

(megawatts)

1.284594457228205203

9541

3230II8

3.188

souna. Ronald Othppo. Southeastern Massathusetts University. privacy Communwalion. &poem.her 1983.

162

Megawatts

1200

Developing Renewable Energy (147)

voirs that contain both steam and water.Plants that tap this less idea! form of geo-thermal energy are found in at least tencountries, though many of the projectsare still experimental. One of the mostsuccessful facilities, in Wairakei, NewZealand, has operated continuouslysince the mid-sixties. Electricity genera-tion declined at this 190megawatt plantat first, apparently because water wasbeing extracted faster than it was beingreplaced. However, generation has sta-bilized since the mid-seventies.36

Sawa: Paoli( Gasand Electne co

800-,

400-

I i1960 1970 1980 1985

Figure 11-S. Electricity Generated at WOrld'sLargest Geothermal Project, The Geysers,

California, 196043

pacity of over 3,000 megawatts.The simplest techttology for genera-

ting electricity is the dry steam systemused at steam-only reservoirs. Four suchsystems are in operation: one commer-cial complex each in Italy and the UnitedStates and two smaller systems in lndonesia and Japan. Electricity genera-tion at these rare, prime sites is mainly amatter of piping the steam to a standardturbine. The largest complex is one atThe Geysers in northern California.which has been rapidly developed in thelast decade. (See Figure 8-3.) In 1983, 17power plants were providing 1,000megawatts of generating capacity for thePacific Gas and Electric Company(PG&E)about 6 percent of the utility'sgenerating capacity. 'Four other develop-ers are active in The Geysers area, in-cluding the California Department ofWater Resources, which uses the geo-thermal energy to pump water into, itsstate water project aqueducts. Totalgenerating capacity at The Geysers fromthe wells °fail five developers may reach2.500 megawatts before the century isout.35

More common are geothermal reser-

Over 130 geothermal power plantsare operating in more than a dozencountries.

A major boost to geothermal develop-ment will occur when generating plantscan use these more abundant geother-mal resources. Conventional "separatedsteam" facilities use the naturally avail-able steam alone to run the turbines.More-efficient "double flash" plants di-rect hot water brought to the surface toa vessel where pressure is reduced andadditional steam generated. A recent in-novationthe binary cycle plantal.lows efficient electricity generationusing lower-temperature water (between150-200' C). Pilot plant tests in China,

Japan, and the United States indicatethat this promising design needs moreresearch and operating experience, how-e *r. Geothermal cogenerationusingthe same energy for both electricity gen-eration and direct thermal usecan alsoincrease efficiency.37

Improving the means of locating anddrilling for geothermal resources wouldspeed the pace of development of thisenergy source. Many industries and cit-ies undoubtedly sit atop hidden geother-mal resources that could provide themwith relatively cheap energy. The dril-

163

(148) State of the World-198-1

ling of wells often accounts for morethan half the cost of some geothermalprojects. Exploration and drilling relieson techniques similar to those used Innatural gas development and improve-mettts should reduce costs. The sophis-ticated remote-sensing techniques de-veloped by petroleunt geologists arebeing adapted to geothermal energyprospecting. This should lower costs,though by exactly how much is hard topredict.

111:purities such as salts and silicates.picked up from subterranean rock by thehot circulating water, typically causescaling and corrosion at geothermalplants. Moreover, the materials that cor-rode or scale the inside of a geothermalsystem often become pollution outsideit. Hydrogen sulfide, a noxious gasfound at almost all geothermal sites, isoccasionally concentrated enough tocause lung paralysis, nausea, and otherhealth problems. Pollution control de-vices developed for use on coal plantemissions can remove approximately 90percent of the hydrogen sulfide, but sofar only The Geysers plant in Californiaand a few others use them. As the cost ofthe devices would constitute less than 10percent of the overall system, expense isno excuse for this lapse; geothermalplants need not become major polluters.Surface water supplies also must be pro-tected from mercury, arsenic, and othersubstattces often dissolved in rot her-mal water."

Like all renewable energy sources.geothermal energy will not flourish with-out amenable institutions. Governmentscould help by conducting broad prelimi-nary assessments to indicate where pri-vate industry should focus its efforts.Most countries with major developmentprograms, including the Philippines andthe United States, have begun such sur-veys, though few are as extensive as theymight be." Also, the uncertain legal sta-

tus of geothermal resources inhibits de-velopment. In most market economies itmakes sense to follow the petroleummodel, giving the private sector primaryresponsibility for developing geother-mal energy but standardizing leasingprocedures and charging the industryroyalty fees if the government owns theresource." Governments may also needto set requirements on plant size andpollution levels to ensure that geother-mal developments do not harm the envi-ronment and that they preserve otherlattd values.

One approach to risk-sharing taken inFrance, Iceland, and the United States isfor the government to reimburse someproportion of the cost of exploratorywells. In Iceland, an Energy Fund pro-vides loans to cover 60 percent of ex-ploration and drilling costs. If the wellis successful, the loan is repaid at nor-mal bank rates using the proceeds fromthe project. If it is dry, the loanbecomes a cash grant and the project isdropped 4t

Prospects for geothermal energy arebright. Its use has expanded more than10 percent per year since the mid-seven-ties; in the two years leading up to June1983, worldwide capacity rose by 26 per-cent. Reliance on this source is likely toincrease five- to tenfold by the end of thecentury, with direct heating playing agreater role in the industrial countriesand electricity generation being moreimportant in the Third World."

Estimates vary greatly on how quicklythe direct use of geothermal heat willgrow. France, which has low-tempera-ture geothermal resources below two-thirds is its land area, aims to have ahalf-million geothermally heated homesby 1990. Canada, China, Japan, the So-viet Union, and the United States couldalso expr ud the direct use of geothermalheat dramatically. Through China's na-tional exploratory program. approxi-

164

Developing Renewable Energy

:irately 2.300 ho spots have been iden-tified, and geothermal experts expect1 country to move rapidly in its devel-, _At of direct geothermal heat. Muchof the Soviet ttnion sits atop low-tem-perature geothermal deposits, and sev-eral district heating projects are underway.43

Geothermal electricity developmentcould add up to 17,000 megawatts by theyear 2000five times the current level.The United States is likely to account forone-third of this total. Energy analysts inHawaii estimate that geothermal source,could supply 1,000 megawatts of thatstate's tlectricity by century's endone-third or mole ot Hawaii's total projectedelectricity supply. Some 20 potentialsites throughout the islands have beenidentified. opening up the possibility ofan interisland electric cable.44

The Philippines has nearly 600 mega-watts of geothermal generating capacitytoday and plans to double this by 1989.Eventually geothermal energy will rivalhydropower as that country's largestelectricity source. Kenya, the only Afri-can nation now generating electricitywith geothermal energy. has doubled itsinstalled capacity in the last two years. ElSalvador has generakod one-third of itspower from geothermal energy in somerecent years. and Mexico plans to have600 megawatts of geothermal capacityby the mid-eighties.45

By any sound reckoning, geothermalenergy use will be substantial in the year2000, though it will remain concentratedin a few areas. Countries such as Icelandand the Philippines will draw heavily ontheir rich geothermal endowment. Andas the technology for tapping geother-mal resources iinpros es and some indus-tries relocate to geothernially rich re-gions, many mere countries will rely onthis renewable resource. It will graduallybecome another strong link ii. a diverseglobal energy system.

(149)

ELECTRICITY FROMSUNLIGHT

Solar photovoltaic cells may become oneof the most rapidly expanding energysourcesand one of the biggest growthitidustriesof the next 20 years. Produc-tion of these cells has nearly quadrupledsince 1981. and worldwide sales totaledapproximately $250 million in 1983.After a decade of being considered a fu-turistic solar energy prospect, photovol-talcs are now entering the commercialmarketplace with a full head of steatn.46

Phctovoltaic cells are a product ofmodern solid -state physics, and they di-rectly convert sunlight, the world's mostabundant and widespread renewable en-ergy source, into electricity. Photovol-taic cells are virtually maintenance-freeand are made from silicon, the secondmost abundant element in the earth'scrust. The first silicon cells, developed inthe United States in the fifties, were ex-pensiveseveral hundred times the costof conventional electricity sources. Butthe need for a lightweight and long-last-ing power source for the space programhelped rescue photovoltaics from obscu-rity. By the late sixties, U.S. companieswere producing enough solar cells topower virtually all U.S. satellites, provid-ing vital defense, scientific, and researchservices.

As fossil fuel prices ros.. in the seven-ties, solar cells became a much more at-tractive energy source; researchers inseveral European countries, Japan, theSoviet Union, and the United Statesbegan to develop solar cells for use onearth. Major advances in the efficiencyand reliability of photovoltaic cells havebeen made in the last decade while ctshave fallen tc a sman traction of theirearlier level.

Current uses for solar cells are quitediverse. though they have proved most

165

(150) Stale of the

popular in applications bur which con-ventional energy sources are itnpracticalor simply not available. A large share ofphotovoltaic systems are used at remotecommunications installations, for waterpumping, and at isolated houses. Othersolar cell applications range from porta-ble modules that are popular on boatsand train cabooses to larger systems torisolated mountain cabins and scientificresearch stations. Although most ofthese are still expensive, particularlysince they normally require batteries,they are usually cheaper than the alter-natives. Also growing in popularity since1980 are solar-powered hand calculatorsand other portable electronic devices.About 60 million solar calculators weresold in 1083, using over 10 percent ofthe solar cells manufactured.47

Approximately 60 companies nowmanufacture solar cells in 20 differentcountries. The United States still holds60 percent of the worldwide market. butother nations are gaining ground ra-pidly. Japan has the fastest-growing in-dustry and now has a 20 percent marketshare. The rest of the industry is cen-tered mainly in Europe, led by France,KAY. and West Germany. Countries withsmaller photovoltaic industries includeAustralia. Belgium, Brazil. Canada,China, England. India. Mexico, theNetherlands. the Soviet Union. Spain.and Sweden." Worldwide production ofphotovoltaics is generally measur..d bythe kilowatts of peak capacity that thesolar cells can generate. The manufac-ture of photovoltairs has grown 75 per-cent annually. from 500 kilowatts ofpeak-power capacity in 1977 to an es-timated 18.000 kilowatts (18 megawatts)in 1983over 100 times as much aswhen the space program was at itsheight, (Sec Figure 8-4.) The solar cellindustry is currently one of the world'sboom industries, and so far its growthrate shows no sign of slowing.49

Cost reduction is the key to solar el(

16'6

WorldI984Megawritaul Capacuy

20

15

10

Sources: Strategies Unhand;PV Energy Systems, Inc.

1

1975 1980 1985

Figure 8-4. Annual World Shipments ofPhotovoltaic Celle, 197543

tricity's future role. Solar cells have fol-lowed a remarkable cost curve, withcosts being at least halved every fiveyears. Although actual average priceshave not fallen quite as steeply as U.S.energy planners had hoped, they havedeclined from nearly $20 per peak wattin 1977 to $8 in late 1983. (See Figure8-5.) Balance-of-system costs add $5-10to the cost of a typical photovoltaic sys-tem. Commercial solar cells generatepower for between 50g and $1 per kilo-watt-hour, ten times the typical price ofgrid electricity in industrial countries.s9

Solar cells are expensive for a numberof reasons: energy-intensive processing,large labor requirements (including themeticulous hand-assemhly of cells), andextensive supporting components.Costs will be reduced by half simply bydeveloping less-expensive methods ofmanufacturing the single-crystal siliconcells that currently dominate the market.Similarly, the efficiency of these cells canbe raised from 10 percent up to 15 per-cent. Another cost-reduction strategy isto develop any of several promisingnext-generation solar cells, such asamorphous silicon, that are likely to becheaper to produce. The main challengeis to obtain efficiencies of at least 8-10

tl.S DebtorsPer Peak Wan

30

Developing Renewable Energy (15I)

Besides offering the prospect of in-expensive power. placing solar-electricsystems on residential and industrialrooftops allows greater energy indepen-dence. In addition to the approximately10,000 solar-electric residences cur-rently in remote areas such as Alaska andthe Australian outback, architects andengineers are designing photovoltaichomes connected to electricity grids inmodern sububan communities. Excesselectricity from residential photovoltaicsystems is sold to the local utility. whilethe homeowner relies on the utility'spower when the sun is not shining. Sev-eral photovoltaic homes have been builtin the United States in the early eightiesand have been successful, albeit quiteexpensive so far. Communities in all butthe must overcast climates should even-tuaily be able to obtain at least one-quar-ter of their electricity from rooftop solarsystems."

Soarers: Strairgus finluaittd.Entrp Svstrau.

20

10

WV, 1930 1985

Figure 8.5. Avenge Market Prices ofPhotovoltaic Modules. 1975-83

percent using materials that lack the in-herently good photovoltaic properties ofcrystalline silicon. Coinniercial produc-tion of amorphous cells began in Japanin 1982 and in the United States in 1983.Some analysts think they will sweep themarket by 1990.51

Larger manufacturing plants employ-ing more - advanced and less-expensiveprocesses arc scheduled to come on-lit.ein 'he next few sears. anti intense inter-national competition for market sharesis already helping to push prices down.By 1990, a total solarelectric system willcost between $4 and $8 per watt andgenerate electricity at a cost of between150 and 309 per kilowatt-hour. This isgetting close to the price consumers payfor electricity in many parts of the world.including Europe and Japan. Further re-ductions are likely after 1990. Sint e thecosts of most electricity sources. includ-ing coal and nuclear power, will con-tinue to rise. 'olar cells should be a com-petitive electricity source in all but a fewareas of the world by the mid-nineties.st

About 60 million solar calculatorswere sold in 1983, using over 10percent of the solar cells manufac-tured.

The question of which use of solarelectricity will prove most economicaland popular in the future is still open toargument. Advocates of centralizedsolar power cite the economic advan-tages of large photovoltaic systems,since one set of power lines and controldevices can serve a large installation.The U.S. Department of Energyfinanced a number of large photovoltaicprojects in the late seventies, including a225-kilowatt solar power project thatprovides electricity for the Sky HarborAirport near Phoenix. Arizona. Soleras.the first major photovoltaic project inthe Third World. was installed in SaudiArabia in 1981, It generates 350 kilo-

167

(152) Slate of the Woad-1984

watts of solai poem foi duce vill.igs,meeting the' de-men, needs of 3.600people.54 (See Table 8-4.)

In 1983 there was a blossoming ofhuge solar -e lectru projects. The firstpin ate4 funded pitmen oltaic pone:plant, built by ARCO Sam, Ins., waseompleted in southern Califiirnia in Feb-ruary 1983, Made possible by the state'ssolar id:: credits, the 1-megawatt projectfeeds power lino the lines of the South-ern California Edison Company. Edi-son's CalifOrnia rival in the alternativeenergy business, the Pacific Gas andElectric Company, now has a 164-megawatt photovoltaic project underw.n. The Sacramento Municipal UtilityDistrict (SMUD) has begun work on a109megawatt photovoltaic power plantIn lar the world's largestscheduledfor completion by 1994 al a total cost ofover $250 million. Early in 1983 ARCOSolar was awarded a contract to com-plete the initial 1-megawatt phase of theSMI'D project for $5 a peak wan, a re-cord low. 1.1 the late eighties, this pro-ject alone could install as many solarcells each yen as were produced world-wide. in 1983.55

Japan began operation of its first solarpower plant, a 200kilowatt facility. inlate 1982. Solar panels are still beingadded to it, and when it is complete in1986 it will have a total capachy of Imegawatt. Japan's New Energy Develop-ment Organization, the principal funderof this plant, has several other projectsin the works, including a 200-kilowattexperimental system for a Japanese uni-versity.56

The European Economic Communityand individual European countries aredeveloping 20 photovoltaic demonstra-tion projects. The five largest will becompleted in 1984.1taly's 1,150-kilowattgover,.ment-funded Delphos projectwas the world's largest operating plantin 1983, In West Germany, a 300 -kilowatt plant is being installed on theisland of Pellworin by AEG Telefunken,the country's leading photovoltaics com-pany. The project will meet all the powerneeds of a recreation center, and excesselectricity will feed into the utility grid,In 1983, 100-kilowatt photovoltaicplants were completed in Denmark,Greece, and Spain.57

Although much of the progress made

Table 8.4. The World's Twelve Largest Photovoltaic Projects, 1983

I'roje( t Expected or Actualor Swami Location Sire Completion Date

(kilowans)

Sac raturmo Muni( . Uoilat California 100.000 1994United Energs Corpoi anon California 20,000 1984Pacific Gas & Efer. Co. California 10,500 1985Uniicd Fair' gs Corporation California 10.000 1984

Delphos bah 1,150 1983ARCO Solar California 1,000 1983

N EDO Japan 1.000 1986Solent+ Sandi Arabia :!:)0 1981

Al..(; 1 eleftittlken %Vest Germain. 300 1983U.S. Department of Iiiirro Arkansas 245 198:U.S. 1)epartinent of Ester* Arizona 225 1982Solarex Maryland 200 1982

sot to I s oildwAtt It tostootr, based on %Anon.% Unirtl's

168

1)rveioping 1?elieleable Eittigt (153)

in phonwohast s so fat has bent ni indus-trial countries. the Third World May Al -

wally gain the most from solar electru itsover the next few decades. Most %Wagesand rural areas in developing countriesstill lack act ess to a steads suppis of de( -tai,, and in dues power is usual!,more xpensne than it is in the indus-trial world. The them:: of extending t en-tral grids into the -heart of darkness"has faded in the face of mounting debtsand the rising cast of vast networks ofpower fines.

Ike most tommon luu its soot t-in most %Wages toda, is a diesel genera-um . Btu these are unreliable and expen-snebetween 200 and $1 per kilowatt-hourmans tunes more than !windelectric n s prices in mdustnal countries.Photottilian ss steins are relanselvottaintenaine-hee. and if solar t ell prit esTall 50 percent or mutt' m the next he'eats. as expetted. solar power will become onotnit al for most sillage eletmat% application,. In man, sillages.photos 'than s are alread, an et onomialwas to run refrigerators. communica-tions sstems. telesiston sets. lights. andnulls. Water pumping is a particularngood use of colar electrit its. since sun-light is usual's available when water ismost needed. In the 'Iltird World, Just afew hundred watts of ptiwerminum tilein industrial nation standards---can pro -side bash amenities for the first time."

(4irrentls mei 90 percent of theworld's solar t ells are produced in indns-ii ial nations. but main developing compt.-ies will min begin production. Moathas e entered the photosoltait s businessdining!' joint %emigres Is i.h establishedtompaniesand at first do onl, pan tif themanufacturing at home. As of ntid -198 :3there were at least eight t ommercial solarcell companies in the Thud World: ahalf-dozen additional (outlines will soonhave indigenous industries. Two Brazil-ian companies have joint sesames inKenya and India. and the gosernment of

Pakistan is planning to introduce solarcrier is icity in 14 villages by 1984.59

Two small U.S. companies, the SpireCorporation and the Chrottar Corpora-tion. are helping to create photovoltaicindustries in the Third World in export-ing manufacturing equipment. in early1983 Chronat ugned a counact withMoroi «) to build a photovoltaic factory.The plant. which will be completed in1984 for $6 million, will manufacture I-megawatt worth of solar cells per yearinitially and 20 megawatts of cells atm-.111 in .1 firs years. A number of othercommies-1.pm Kuwait. and the Phil-ippinesare understandabh impressedand are negotiating with Chronar to pur-chase factories of their own 60

Some countries. including France. theUnited States. and West Germany. sup.port photovohaics through their foreignaid programs. Since the mid-seventiesPunt e has had major programs underwa, to install solar-powered pumps andtelesision sets in West Africa. The televi-sion sets. modified to require as little as20 watts of power. bring educationalprograms to people in remote areas at areasonable ost. The U.S. Agency for In-ternational Des ailment installed eightspenall, designed solar-powered vac-cine refrigerators at rural health centersin 1982 and has another dozen small-scale projects under way."

One of the more ambitious plans forplunovollau s is to provide electricity forwhole sillages. The first experimental%Wage system was installed on thePapago Indian Reservation in Arizona in1978, Since then its 3.5 kilowatts of cellshave run water pumps. lights. refrigera-tors. and communal washing and sewingmachines for the village's 96 residents.who pieviously had no electricity. Amuch larger. 25-kilowatt system in-stalled in a Tunisian village in 1982 ispumping water, providing power for ag-ricultural tasks. and meeting householdneeds. Thousands of village solar-elec-

1,69

(154) State of the World-1984

irk systems «mid be in use by 1990. Forthis to occur. howe%er. governments andinternational aid agencies must arrangeinnovative financing. One thing they calldo is so use agricultural extension ser-vices and subsidized loans to encouragethe use of solar pumps and mills.62

Although solar cells are still one of themost expensive renewable energysources, they are also advancing themost rapidly. Based on recent industrytrends, photovoltaics should begin re-placing most diesel generators and be-come the largest new source of electric-ity for villages in developing countrieswithin a few years. And with utilities tak-ing the lead, centralized photovoltaicpower stations could become a wide-spread electricity source in many indus-trial regions by the late eighties. By theearly nineties, rooftop solar-electric sys-tems should begin so catch on.

Worldwide annual production ofphotovoltaics is likely to exceed 200megawatts of capacity by 1990 and pass1,000 megawatts b,, the end of the cen-tury. This will make the photovoltaicsbusiness a $10-billion industry by theyear 2000. Total installed solar-electriccapacity will probably be between 5,000and 10.000 megawatts by century's end.Although this will supply just a smallfraction of the world's electricity, it willset the stage for widespread introduc-tion of solar electricity. By the middle ofdie twenty-first century, photovoltaicsmay be providing 20-30 percent of theworld's electricity and serving as a cor-nerstone of a sustainable global powers%stem.0

ENCOURAGINGDEVF.LOPMENTS

Diversity is a hallmark of the renewableenergy developments oldie past decade.

With more than a dozen renewable en-ergy sources being explored in a varietyof settings around the world, the occa-s;)nal hiled project or neglected oppor-tunity does not jeopardize overall prog-ress. In a time of scarce capital and highinterest rates. spreading the risk inher-em in developing new energy sources isclearly a benefit. Modern communica-tions have permitted the rapid dissemi-nation of information among research-ers and entrepreneurs, acceleratingrenewable energy development far be-yond the pace that would have been pos-sible in a previous era.

This chapter only hints at the literallythousands of technologies and conceptsbeing tested by individuals and compa-nies around the world, Joining windpower, fuelwood, geothermal energy,and photovoltaic systems in the progressof the past decade are small hydro-power, passive solar design, active solarheating, solar-thermal electricity gener-ation, and liquid fuels from biomass. Forrenewable energy, the oil price rises ofthe seventies had a catalytic effect,stimulating a tremendous surge of inno-vation that has far from run its course.

Much of the progress in renewable en-ergy is not apparent to those whoconfine their energy studies to the anal),sis of aggregate energy statistics, wheremany renewable sources do not yet ap-pear at all. (Until recently, for example,the U.S, Department of Energy did notinclude residential fuelwood use in itsstatistical reports, although it ranks asthe country's fourth largest heatingfuel.) Yet the progress to date estab-lishes a firm base for development, Evenwithout further oil price increases, manyrenewable energy sources are economi-cally competitive.

One sign that renewable energy hascome of age is that conferences on thevarious technologies are now frequentedby businesspeople and bankers talkingabout venture capital and "buy-back

I '70

Developing Renewable Energy lr551

rates" as well as le( NM .111 specifications.Newsletters arc published for those m-terested in renewable energy invest-ment: solar stock indices are availablefor those who want to keep track of theirinvestments. Topflight scientists and en-gineers are invoked in tnany of the re-search programs. Renewable energy islosing some of its counterculture image.though it is still strongly supported b)many environmentalists, communityleaders. and consumer groups who favorrenewable energy for its euvirotintentaland social advantages.

In order to flourish, renewable energydevelopment must be integrated withexisting institutions. Only then willenough trained people and sufficientfunding be available for long-term de-velopment. Oite of the encouragingtrends of the early eighties is the ciea-tion of a variety of nongovernmentalmechanisms to facilitate this. Mostprominent are the "third parts' desel-opers in the United States who constructwind farms. wood-fueled power plants.and the 1" attd sell the power to utili-ties. .v tax credits, these outfitsare 'at ...asing the investment fundsavailable for some renewable energysources and are stimulating new indus-tries to build and service the equipment.

Dozens of communities around theworld have taken the initiative to de.velop their own renewable energy andconservation plans. This approach helpsbypass the barriers posed by existing M-stitutions that are reluctant to try some-thing differentoften the chief problemin getting a new energy source estab-lished. Energy prograins in which individuals assume much of the responsi-bility for needed changes have generallyproved more successful than those runby distant bureaucrats.

Most Third World countries alreadyrely heavily on renewable energy but thedifficulties they face in using it on a sus-tamable basis are considerable. Renew-

ahle resources are eroding at a frighten-ing rate M developing countries, and thetechnical expertise and financial re-sources needed to adapt or develop newenergy technologies are often lacking.Mobilising people and channeling avail-able funds to productive use depends ona redirection of institutions. The com-munity forestry program in South Koreaand the biogas program in China are twoexamples of how properly harnessedefforts can accelerate the developmentof renewable energy while helping pre-serve a country's resource base.

No energy transition unfolds over-night. Switching from wood fuel to coalduring the Industrial Revolution tookmost countries a century or more, andseveral decades were needed for oil andnatural gas to take hold. The key to aviable renewable energy-based future isthat the world manage the transitiongradually--phasittg in new fuels beforethe old ones run out and simultaneouslyreshaping economies and societies. Thelast decade's progress has cleared theway for gradual change. Energy conser-vation can continue to provide breathingroom for development of new technolo-gies and allow a smooth meshing of re-newable and conventional energysources during the transition. This his-torical transformation will provide op-portunities for creativity and growth forgenerations to come.

Conservative projections compiled byWorldwatch Institute in early 1983 indi-cate that worldwide use of renewable en-ergy will expand at least 75 percent bythe end of the century." This will beenough to meet half of the world's addi-tional energy needs by that date andone-quarter of total energy needs. Morerapid growth is likely after the turn of thecentury as oil supplies dwindle andprices riseand as developers take ad-vantage of the tech'.ological advancesthat will have occurred in the interim. Bythat time. there will be mature industries

171

(156) State of the World-1984

producing wind generators. small hy-droelectric turbines, and methanol dis-tilleries for world markets.

With proper management, renewableenergy sources could easily supply asmuch energy as the world uses today be-fore running up against resource con-straints. Assuming a substantially moreefficient world with twice the currentpopulation and several times the currentwealth, renewable energy should be ableto meet our needs indefinitely. Reachingthat point will be difficult, but given thefailed promise of nuclear power and thefact that fossil fuels are fading rapidly,major reliance on renewable energyafter the year 2000 may be essential.

Fifty years from now historians willlook back at the world's heavy relianceon one fuel as an unhealthy anomalyborn of decades of low oil prices. In thefuture, differences in climate, natural re-sources, economic systems. and socialoutlook will determine which energysources are used where. Some countrieswill depend on five or six major sourcesof energytrue energy security. As en-ergy supply patterns change. so willeconomies and societies. Industries willtend to locate near large rivers. geother-mal deposits. and other "lodes" of re-newable energy since these fuels are lessportable than oil. New patterns of em-

ploy ment. new designs for cities. and arevitalized rural sector could all emergewith renewable energy development.

For individuals and for the environ-ment the changes could be rejuvenating.Because "renewables'' are less pollutingthan coal, people will breathe easier asenergy systems change, as will crops andforests. And renewable energy offerspeople striving for self-sufficiency thechance to take more direct control oftheir energy supply. For many people inthe Third World, renewable energy de-velopment will bring electric lights, run-ning water, and television for the firsttime.

Renewable energy is no panacea, how-ever. As various forms of it are devel-oped. land use pressures will intensifyand environmental conflicts ariseal-ready foreshadowed by disputes over thelocation of wind farms and the illegalcutting of fueiwood. Each energy sourcemust be carefully developed and trade-offs carefully weighed if renewable en-ergy is to provide the maximum benefitsto society. The first step is recognizingthat renewable resources area key to theworld's energy future. The record of thepast decade shows that they deserve amuch higher place on the energy agen-das of nations.

1 72

9

Reconsidering theAutomobile's Future

Lester R. Brown

In the rapidly changing resource andeconomic milieu of the late seventiesand early eighties the future of the auto-mobile has received too little attention.The only question seems to have beenwhat the source ' : future fuel supplieswould be. It has been assumed, perhapstoo readily, that synthetic fuels couldquickly replace gasoline and diesel fuel.

Within the auto industry. many be-lieved it was only a matter of time untilthe automobile became the centerpieceof transportation systems everywhere. A1978 study of the world automobile in-dustry projected the world fleet wouldexpand from just under 300 millionvehicles at the time to some 700 millionby the year 2000, reaching one car forevery eight people.' Yet projectionssuch as these are not materializinglargely because they were based on anarrow information base and a corre-spondingly narrow set ofconsiderations,failing to account for a long list ofemerging resource, economic, and polit-ical constraints.

Competition for resources arises. for

example, because automobiles requirenot only fuel but land as well. In denselypopulated China, where land is scarce,the private automobile is virtually un-known. International indebtedness onan unforeseen scale in the Third Worldand in Eastern Europe is restricting au-tomotive fuel imports in scores of coun-tries. At the individual level, the narrow-ing margin of global economic growthover that of population is preventing therise in affluence needed if car ownershipis to spread as projected.

THE AGE OF THEAUTOMOBILE

Although early automobile technologydeveloped more or less apace in West-ern Europe and in North America, it wasin the United States that the new tech-nology first took root and flowered.Henry Ford's ingenious production ap-

173

(358) State of the Mr 1d-1984

proadi. 0011 copied by other manufac-turers, led to a rapid spread of automo-biles throughout the United States. In1900 there were 8.000 registered cars;by 1930 there were 23 million.2

The depression decade of the thirtiesand the war decade of the forties saw aslowing of growth. Nevertheless. the au-tomotive society evolved much faster inthe United States than in Europe. Thecountry was still a relatively young oneus cities were young and, unlike those inEurope with their narrow streets, theymade room for the automobile as theyevolved. And the United States had an-other major advantageus own oilfields.

Although the automobile became acommercially viable means of transpor-tation shortly after the turn of the cen.fury. the great worldwide growth in itsuse did not occur until after World WarH. when oil was priced at $2 a barreland the world economy was embarkingon a quarter-century of unprecedentedgrowth. As recently as 1950 the worldfleet ntsntbered only 48 million. (SeeTable 9 -1.) In its adolescence, during theearly fifties, the world auto industry wasproducing just under 10 million vehiclesper year. But in 1958 production began asteep climb that continued. with only anoccasional interruption, until it reached30 million per year in 1973. At this pointsome 100.000 automobiles rolled ofl theworld's assembly lines each working day.underlining the economic importance ofautomobile manufacturing.2

In 1980 Japan produced 7 millionautos, compared with 6.3 millionAtnericanmade cars.

During the first half of the twentiethcentury, auto production and ownershipwas concentrated in the United States.

Table 9.1. World Automobile Fleet,1950-82

Year Passenger Cars'

(n1950 414

1953 67

1960 9°

1965 130

1970 181

1971 1941972 2071973 220197.4 236

1973 2491976 2601977 2701978 2861979 297

1980 3101981 3211982 331

'Registrations as of January 1 of Year limed.soma. Motor rattle Manufacturers Associa-two. World Motor rektrte Data Book. 1982 Malan(Demon. MI6.: 19821.

Indeed, as recently as 1950 two-thirds ofthe world's automobiles were owned byAmericans. (See Figure 9-1.) it was notuntil 1968 that the test of the worldfinally caught up. Since th,:n. two-thirdsof the growth in the fleet has occurredoutside the United States.4

A vigorous auto industry has emergedin Japan in recent decades. Although au-tomobile manufacturing had scarcelybegun in that country in 1960. the indus-try grew at a remarkable rate. In 1980Japan produced 7 million autos, contpared with 6.3 million American-madecars. For the first time since the automo-bile age began. the United States was nolonger the world leaders In contrast tothe U.S. industry. Japanese automakershave been heavily export-oriented, pro-

1 74

Minion225

200-

&mustering the Automobile's Future

MO-

MO-

50-

i

United Sums

Rest ofWorld

Source. Motor Vela&Manufacturers Assn.

1950 1960 1970 1980 1985

Figure 94. Passenger Car Registrodoss, UnitedStates and Rest of World, 195042

ducing cars that could be marketedthroughout the world. Their success wasreinforced by the oil price increases in1973 and 1979. which greatly strength-ened the market for the smaller, morefuelefficient Japanese model. This com-bination of fuel efficiency. quality engi-neering. and low price has made Japa-nese cars formidable competitors inmarkets everywhere. So formidable, infact, that by the early eighties the UnitedStates and several European countrieswere pressing the Japanese to voluntar-ily limit their exports.

As the seventies began, automobileownership in the United States and inthe industrial countries of northwesternEurope was nearing saturation, a situa-don where the market for new vehicles isdominated by replacement needs. Thelarge, undeveloped markets appeared tobe in Eastern Europe, the Soviet Union.and the Third World. where the privatecar was still a cherished status symbol inthe late twentieth century. automobileproduction has emerged as the world'sleading manufacturing industry. Withnumerous linkages both backward to-ward the raw material suppliers and for-

(159)

ward toward those businesses associatedwith car sales and maintenance, it issometimes referred to as the "industryof industries?'

THE DECLINE INPRODUCTION

Given the near universality of oil as anautomobile fuel. it is not surprising thatthe automobile's fate is so closely tied tothe price of petroleum. The oil pricehike of 1973 caused a drop in world autoproduction to 25 million in 1975. (SeeFigure 9-2.) As the price of oil stabilizedin the mid-seventies and as the real priceof gasoline again began to decline. thedemand for automobiles resumed an up-ward climb. By 1978 production reached31.8 million vehicles, the highest ever.and 1979 nearly matched that level. Butafter these two backto-back records,production fell for three consecutiveyears. There was a slight upturn in 1983,though output that year was still some 15percent below the peak years of 1978and 1979.6

Million35

20-

to-

Sources: Motor VehkkManufacturers Assn.; WorIchoatch

1950 19160 19-70 1980 1985

Figure 9.2. World Production of PassengerCars, 19504$

175

(160) State of the World-1984

From 1950 to 1973. when oil cost $2per barrel, oil production increased at7.6 percent per year and automobileproduction at an almost equally phe-nomenal anginal rate of 5.8 percent. (SeeTable 9-2.) The 1973 increase in the oilprice to $12 markedly slowed the pro-duction of both petroleum and automo-biles. Six years later, the second oil pricehike actually triggered a decline in theproduction of both, with the annualdrop in each case exceeding 5 percentover the next three years.

The decline in global automobile pro-duction since 1979 has not been dis-tributed evenly among the world's prin.filial manufacturers. In both the UnitedStates and Western Europe, the falloff'was disproportionately great. TheUnited Kingdom, with one of the leastcontpetitive industries, was hit hard. Inthis case a long-term decline resultingfrom gradual loss of competitiveness hasbeen accelerated by the changing auto.mobile market and rising fuel prices. InJapan, however, production actually in.creased in 1980 and then reached a pia.teau during the early eighties. In 1981the automobile industry in North Amer-ica was producing at 66 percent of capac-ity. Western Europe was at 79 percent ofcapacity, and Japan was at full capacity.?

Despite its historical lead and the ad-vantage of the world's largest domestictnarket. American manufacturers wereunable to fend off the challenge from thefuel.efficient, high-quality. lower pricedJapanese vehicles. (See Figure 9.3.)

These advantages, which have givenJapan the edge in the world auto market,are going to make it exceedingly difficultfor the United States to regain the lead.

Within the Third World, growth of thedynamic Brazilian automobile industrywas effectively checked by the 1979 pricerise. Although somewhat protected byits increasing production of sugarcane-based alcohol fuel, Brazil was nonethe-less affected by the overall downturn inglobal economic activity. Not only didautomobile exports level off, but the se-vere internal economic stresses led to asharp decline in domestic sales as well.'

Another of the world's most dynamicdeveloping economies, South Korea,also found itself in difficulty in this sec-tor. A latecomer to automobile assem-bly, the Korean industry, with the directsupport and encouragement of the gov-ernment, had been planning a several-fold increase in automobile outputwithin a span of a few years. By 1980,however, it was using only 30 percent ofits total production capacity of 235,000vehicles per year" Caught in the earlyphase of rapid expansion by the 1979 oilprice increase, the country's export-ori-ented industry faced intensified compe-tition and, in many cases, import restric-tions in the major markets.

The fall in automobile productionsince 1979 is only partly due to soaringlbel prices and high interest rates. Alsocontributing has been the slowdown inglobal economic growth since 1979aslowdown to the point where overall

Table 9-2. World Oil and Automobile Production, 1950-83

Oil Price Oil AutomobilePeriod Per Barrel Production Product ion

(dollars) (percent ambial change)1959-73 2 7.6 5.81973-79 12 2.0 1.11979-83 31 5.2 3.0socuers: :Wyman Petroleum Institute. Bow Nook,* Data Book (Washington D.C.: 1983). MotorVehicle numbs timers Assoc imion. Itor/d Moto* rditik Data Book. 19$2 Edthon (lkiroti: Mitt.: 1982).

176

Million

10

Itemostdertng the Automobile's Future (161)

1978 are numerous and diverse. Comingon the heels of a tripling of world auto-mobile output in less than two decadesand at a time when rapid growth wasprojected in world auto sales, the down-turn was traumatic, to say the least, espe-cially in the United States. It drove someof the world's largest automobile manu-facturers to the brink of bankruptcy; oth-ers survived only by merging.

The most immediate social impact wasrising unemployment among automo-bile assembly-line workers. Among themajor producers the rise in lost jobs wasmost pronounced in the United States.After peaking in 1978 at over one mil -lion, U.S. auto industry employment de--,

dined steadily in each of the next threeyears. By 1982 one-third of the workforce was unemployed.0 In some cases,a reduction in the number of shifts in agiven plant caused the unemployment.In others, plants closed. From 1978through 1981 some 20 U.S. automobileassembly plants shut down. Many. suchas the Ford plants producing full-sizedcars in Los Angeles and in Mahwah, NewJersey. closed permanently.12

Thousands of small firms supplyingparts to the major auto manufacturerswere also hit hard. In 1979, the U.S. De-partment of Transportation estimatedthat the American auto industry spent573 billion on materials, parts, services,and equipment. Of this, some $55 bil-lion was spent in the United States, pro-viding an estimated 1.4 million jobs. Asa result of the 1978-82 downturn, an es-timated half-million jobs were lost infirms that supplied parts and compo-nents.13

The ripple effects also reach all theway to the manufacturers of basic auto-motive raw materials such as steel, rub-ber, and glass. Each of these industrieshas been affected both by the reducedvehicle output and by downsizing. Withthe auto industry accounting for close toone-quarter of U.S, consumption of iron

5

Unite.1 States'

iSolom Motor Vehtele... Mattufait. Aws,

1950 19110 1970 1980 1985

Figure 9.3. Produrtion of Passenger Cars,United States and Japan, 1950.83

world onomic growth barely matchesthat of population. The result is stagnat-ing per capita income and purchasingpower. Without income gains, the num-ber of consumers who can afford au-tomobiles will remain limited. In addi-tion, governmental tax policies in manycountries are discouraging automobileownership. In many Third World coun-tries that do not assemble their own au-tomobiles, import duties arc used to dis-courage vehicle ownership,10 Thecombination of these economic trendsdampening consinner demand and gov-ernmental policies discouraging carownership may prevent a resumption inthe growth in demand for automobilesthat has characterized most of this cen-tury.

EFFECTS OF THEPRODUCTION DECLINE

The effects of the four-year, 15 percentdecline in world auto production since

177

(162) State of the WorldI984

and steel. and with the average weight ofa new car dropping. the demand for steelfell sharply, further depressing an indus-try already in the doldrums. Not all thenews is bad. however. because the down-sizing in Detroit is generating a demandfor lighter. stronger. more expensivesteel. Although the volume of steel salesto the automobile industry may be down.unit profits are up.11 The amount of rub-ber used by the automobile industry hasalso declined, both in new cars and asreplacement tires on used cars. Projec-tions indicate that by 1985 a majority ofAmerican vehicles will be rolling on 13-inch tires rather than the more tradi-tional 15-inch ones.I5

The stresses of the downturn haveheen no less severe on the industries atthe consumer end of the marketingchain. The number of U.S. automobiledealerships has been gradually decliningsince 1950 as the larger, more efficientdealers acquire more of the market, butthe rate of dealership closings ac-celerated in the early eighties. During1978, for example. 144 new-car dealersclosed their doors; by 1980, this had in-creased to 1,558a near-record de-cline,I6

pillionGallons

100

1950 11160 19'70 19130 1985

Figure 9.4. Consumption of Gasoline byU.S. Passenger Cars, 195042

1

Table 9.3. United States: GasolineService Stations, 1970 -83'

YearServiceStations

1970 220,0001971 220.0001972 226,5001973 215,9001974 196.100

1975 180.5001976 186,8001077 176,5001978 172.3001979 164.800

1980 158,5001981 151,2001982 144,70019832 139.200

I Docs not include outlet% at convenience stores.etc . %here gasoline accounic (or less than half oftotal sales. fPrelittonary.'Wiwi:: Votional Petroleum Yews Fad Book, 1983(Chicago: Hunter !publishing Co., 1003).

Completing the circle of the far-rang-ing impact of rising oil rices, U.S. gaso-line sales were hurt by falling auto sales,by the rising fuel efficiency of the cars ofthe road, and by a decline in milesdriven. After increasing from 24.3 bil-lion gallons in 1950 to an all-time high of83.8 billion gallons M 1978, the amountof gasoline used in passenger carsdropped to 73.7 billion gallons by 1980.After this precipitous fallI2 percentwithin two yearsthe decline slowedmarkedly M 1982 at -:d 1983." (See Fig-ure 9-4.)

The number of service stations. al-ready affected by a movement towardlarger outlets, fell even faster than gaso-line sales. Between 1972, when the number of U.S. service stations peaked at226,500, and 1983 over 87,000 stationsclosed, (See Table 9.3.) If the projectedgains in U.S.fleet fuel efficiency matedalize, more service stations are likely to

178

Recoundertug the elutomobt:e's Future (163)

go out of business. reducing tb ital toperhaps half or less of the 1974 peak.

A11 in all, the second oil price increasehad a far greater impact than the firstone. The world auto industry could ad-just with a modest effort to the 1973 in-crease, but the 1979 jump that pushedprices beyond $30 per barrel posed ex-traordinarily difficult problems. The firstprice rise could have beet' handledlargely by downsizing automobiles andincreasing fuel efficiency. The secondone, however, has forced a generalreevaluation of the wisdom 41f depend-ing heavily on cars as a primary source ofmobility.

FUEL EFFICIENCY GAINS

A smooth transition to a sustainable so-ciety depends on the far more efficientuse of liquid fuels. And since close toone-third of all oil is burned in automo-biles, designing cars that are more fuel-efficient is the key. Worldwide, the ad-juvalent has thus far been concentratedinol.e United States, which at the time ofthe 19'i6 Automotive Fuel Efficiency Actaccounted for roughly half of world gasohne consumption.

Between -1950 and the 1973 oil pricehike, the size and horsepower of the av-erage U.S. automobile increased stead-ily, with the result that overall fuel efficiency gradually declined, reaching alow of 13.1 miles per gallcn in 1973.18(S,. Figure 9.5.) The purpose of the1916 legislation, which was to apply toeach year's new models from 1978through 1985, was t Jughly to double thefuel efficiency of American cars. Tbe:ishortly after Detroit had begun the mas-sive redesign ofmnomobiles required toachieve the federal standards. the 1979oil price hike created market conditionsthat raised the average fuel efficiency of

MolesPer Callon

30

Federal Standards

New Cars

kie-e i Average.-'- - --/-

20-

10-

Sources: Federal Highway Adiiun.;Motor Veluck Maeufact. Assn.

I

1950 1960 11170 1480 1985

Figure 9-5. U.S. Automobile Fuel Efficiency.195045

new cars over the next three years evenfaster than required.

The combination of rising fuel pricesand the federal efficiency standards ledto a pronounced shift toward small cars.In 1970, some 37 percent ofall new carssold in the Untied States were subcom-pacts and --inpacts. Large carstheluxury, scan rd. and intermediate sizesaccounted for 65 percent. By' 1981these proportions had been roughly re-versed, with large cars representingabout 35 percent of sales and small cars65 percent. (See Table 9-4.) Marked de-clines in U.S. gasoline prices in 1982 and1983, however, renewed buyer interestin larger cars, and the small-car share ofsales dropped for the first time since the1979 oil price hike.

To achieve the efficiency called for inthe fedet al standards and demanded bythe market, Detroit iindertbok a massivedownsizing of new tars. The principaltechniques used were weight reductionan a shift to smaller...less powerful en-gines. In 1975 the average new car pro-duced in Detroit weighed 3,970 pounds.roughly two tons. Bin by 1982 the aver-age weight had dropped to 3.001pounds, a reduction ofone-fourth in fiveyears.19

179

(164) State of Me World -1984

Table 9-4. United States: PassengerCar Sales by She, 1970 -82'

YearSmallCar.

LargeCar.

TotalSales 2

Small-CaShare

(million) (pen ent)1970 3.1 5.3 8 4 371971 3.9 6.3 102 381972 4 2 0.8 10.9 381973 4 9 6.5 1 I.4 431974 4.3 4.5 8.9 49

1975 16 4.() 8.6 531970 4.9 5.2 10.1 491977 5.4 5.8 11.2 481978 5.7 11.3 491979 5 9 4.7 10.7 56

1980 5.7 3.3 9.0 631981 5 5 3.0 8 6 651982 5.0 3.0 8.0 62

1"Small" (Argon me lode% sub(ompats. tom.pat ts and unporo. "large- includes intermediate.standard, awl loam% (an :Ma. not 4111(1 due torounding.SOMCE- NiOtor Vail( Matitifactureri Mocta-(too. Moot Mule Farts and Figures '83 (Detroit.Mich . 1983)

The shift to less powerfid, more fuel-efficient engines is equally impressive.As recently as 1977, 76 percent of allU.Smanpfactured automobiles hadfight-c tinder engines. (See Table 9-5.)Since then. their share of the market hasfallen precipitously. averaging 28 per-cent during the early eighties. Mean-while. six - cylinder engines have pickedup some of 'It was once the eight-("finder ma ..eq. increasing their marketshare from one-fifth to one-third. Atthe most efficient end of the spectrum.the number of four-cylinder enginesjumped from less than 10 percent ofthe market during the mid-seventies to41 percent in 1982. In addition to thepronounced shift ,owaid four - cylinderengines, 4.;eneral Motors has a three-q finder. two-passenger commuter ti chi-de in the wings that it may begin manu-facturing if fuel costs rist enough to

assure a market for it.20Other steps to improve fuel efficiency

include adopting front-wheel drive andmanual transmission and paying greaterattention to aerodynamics. As recentlyas 1977 there were no front-wheel drivevehicles coming out of Detroit. By 1985,the overwhelming majority of American-made automobiles will have front-wheeldrive. And manual transmissions shouldaccount for 17 percent of all Americancars by then.21

Overall,. the 1975-82 period wit-nessed a major transformation of the

automobile industry, one fargreater than any since its fledgling stageat the turn of the century. The transfor-mation has been not only in the design,performance. and appearance of the au-tomobile, but of the entire automotiveindustry and, because of its dominantrole, of the U.S. economy itself.

Renault plans to have a vehicle onthe market by 1985 that will get 80miles per gallon on the highway.

Although the shift toward fuel effi-ciency was most dramatic in the UnitedStates, it was a worldwide phenomenon.West Germany, Japan, and the UnitedKingdom were al.,o taking steps to in-crease the fuel efficiency of new automo-biles. In West Germany, automakersagreed at the time of the 1979 oil pricehike to raise the fuel efficiency of theirnew cars by 10-12 percent. In Japan, leg-islation was passed that same year set-ting a 32-mile-per-gallon average fornew cars by 1982, (By comparison, theU.S. standard for 1985 is 27.5 miles pergallon.) Mexico belatedly responded tothe need for greater fuel efficiency bybanning the manufacture of eight-cylin-der engines as of November 1984.22

Even as governments were raising fuel

1 So

Reconsulenng the Automobile's Future

Table 94. United Stater The Changing New Car, 1975 -821

(165)

ModelYear

AverageWeight

Number of Cv ',niers Per Engine?A%erar

Fuel&oilcan%8 6 4

(pounds) (percent) (miles per gallon)1975 4.058 72 19 9 100 14.7

1976 4.059 60 21 10 100 1(1.5

1977 3.944 76 18 6 100 17.1

1978 3.589 66 24 10 100 18.61979 3.485 57 24 19 100 19.01980 3,101 32 314 30 100 '21.2

1981 3.099 24 35 41 100 235198:: 3.001 27 32 41 100 24.6

'Excludes imports. rl otal excludes diesel enginessot licfrA Niourt Veliu he Nlaitirm turas %iiu iation, Mow i chub boa, aid her" '83 tlktrtu Moth1983). Philip Patterson. l' S Department ol hulls. prisme commune( at ))))) . (k tuber 12. 1983

efficiency stamtuds. it became clear thatcars could be far more fuel-efficient thanthey are now_ In the United States. theBattelle Memorial Institute, one of theworld's larg. st consulting firms. chal-lenged its engineers to design a four-passenger car that could get 100 milesper gallon. Their response was a vehiclethat would weigh just over 1.000pounds: it would have a variable speedtransmission with a microprocessor ad-justing engine speed to achieve maxi-mum fuel efficiency. Using only cur-rently available technologies, theengineers showed that with a diesel en-gine this automobile could get 100-105miles per gallon. Even with a conven-tional gasoline e' ;Me it could get 80-86tulles per galloti.is

Individual manufacture! s ,were alsomoving forward. In Frank:, Renaultplans to have a vehicle on the market by1985 that will get 80 miles per gallon onthe highway. Across the channel. BL Ltd.(formerly British Leyland) began mar-keting a "mini-metro" in late 1980. At asteady 30 miles per hour, it can get 83miles per gallon; in variable-speed urbandriving, it can average 41 miles per gal.Ion. BL plans to market this vehicle onhin the United Kingdom and Europc.24

In the United States, the General Mo-tors three-cylinder vehicle mentionedearlier can get 86 miles per gallon at asteady 25 miles per hour. and 60 milesper gallon on the highway. Although theengineering of this vehicle is largelycompleted. plans to move the demon-stration model into production are un-certain.

In Japan, six of nine automobilemanufacturers are marketing mini-cars.with engines of less than ',50 cubic centi-meters. This is less than half the size ofthe engine in yesteryear's small cars.such as the internationally marketedVolkswagen Rabbit, or the Japanese carsnow marketed in the United States andEurope, which have engine displace-ments of roughly 1,200 cubic centime-ters. tk,

The Japanese ni ;PI ; .sr t roil*?*?ragetnore than 50 indef. pc- !cation/ orroughly double the federal requirementsfor U.S. vehicles in 1985. Weighing anaverage of 1.200 pounds, these vehicleswere selling for 32.0004000 in Japan in1983. Sales of mini-cars and aim mini-truck equivalents there totalvd 1.3 mil-lion in 1982.25 With thew small, highlyefficient vehicles already in production,theJapanese are well positioned tt tyke

JR?.

(166) State of the World-1984

advantage of the next sat gi in world oilprices. The combination of economicconditions and future fuel price projec-tions indicates a growing worldwidemarket for thew smaller cars that pro-% ide adequate tramportatton at muchlower purchase and operational prices.

ALTERNATIre, FUEL

PROSPECTS

Governments, automobile manufactuers, and car owners are all keenly inter-ested in the development of alternativeautomotive Inds in light of the inevitabledepletion of oil reserves. Although thereare many potential sources of automo-tive fuel beyond the conventional re-serves of oil, progress in developingthem has been limited to a few countries.

Prominent among the new fossil fuelsources of liquid fuel are coal, tar sands.and oil shale. Th technology for lique-fying coal was developed by the Ger-mans in the twenties and thirties andused extensively during World War 11 tcsubsinute for imported oil as supplieswere cut off. After the war, however,Wes! Germany quickly returned to refin-ing imported oil, a much cheaper fuel.

As of 1984. only one country. SouthAfrica, is producing liquid fuel from coalon a meaningful scale. For political rea-sons. South Africa has always felt :)artic-Wady vulnerable to ewbargoes by vari-ous ltill suppliers and has accordinglymade a strong effort to develop liquidfuels from its extensive coal reserves.The first commercial plant began opera-tion in 1959, suppling some 10 percentof the countWs automotive fuel. Sincethen output has expanded to the pointwhere close to half of South Africa's au-tomotive fuel now comes from liquefiedcoal.% Other national governments and

major oil companies developed plans toinvest heavily in coal liquefaction duringthe late seventies, but unfortunatelynearly all these were abandoned becausethey were not economical.

Reserves of a second source of liquidfueltar sandsin Canada, the UnitedStates, Colombia. and Venezuela con-tain as much petroleum as the oil fieldsof the Middle East. but the economic andenvironmental costs of extracting it arehigh. Leadership in this field has comefrom a Canadian r .iisortium that in-cludes the government and major oilcompanies. A $2- billion commercial fa-cility located in the Athabasca RiverBasin of western Canada was designedto produce 100,000 barr.:.le of oil perday. but thus far has managed to pro-duce only half that amount,'

Extracting oil from shale deposits iseven more difficult and costly than ob-taining it from tar sands. Some of theworld's richest oil shale deposits arefound in the western United States, inColorado, Utah, and Wyoming, wherethe oil is tightly locked into rock forma-tions just beneath the surface. Althoughseveral companies, mostly in the oil busi-ness, are interested in exploiting this po-tential, the possibility for doing so seemsalways to recede as the cost of extractioncontinuously rises beyond the currentworld price of oil. As of mid-1983 theU.S. Synthetic Fuels Corporation,launched in 1979, has had troublefinding commerc: . 'ty viable synfuel pro-jects to fund,te Projects to develop oilshale, to liquefy and, gasify coal, or toconvert peat into liquid fuel have rarelyproved worthy of the corporation's sup-inn.

Another potentially important com-'racial automotive fuel is electricity.Here the constraint is the difficulty ofdesigning an economically feasible elec-tric car. One o f the drawbacks of existingelectric autos is limited range, whichsuggests they are tatter suited for coin-

112

nernpsulering the

muting and short. hired-route commer-cial applications than for long-distanceroad trips. The basic technoiogy is ap-propriate for various specialized pur-poses. such as forlifts in warehouses.where the fumes from internal combus-tion engries are unhealthy. or gulf carts.which m. quite light, travel only shortdistances. and require little power. Thecost of periodically replacing the batter-ies an electric cars is often prohibitive.F.s en though these can be rechargeddaily 'rout conventional electricity out-lets. they wear out within a year or two.Nevertheless, the technology does seemwell suited to countries that have anAbundant e of (heap hydroelectricity.

'Ilte most successful hiologicallybased hvitt het lc fuel venture to date isthe development of sugarcane-derivedalcohol Weis in Brazil. At a stage of rapidindustrialization and dependent on isn-ports for 85 percent cif its oil. Brazil hasfelt vulnerable to soaring oil prices andto supply disniptions. It has attemptedto compensate for this by developing in-digenous liquid fuel sources. With apoor endowment of fossil fuels but a rel-ative abundance of land. the govern-ment decided in 1975 to launch a mas-sive alcohol fuels project intended toachieve liquid-fuel self-sufficiency by theend of the century, if not before.

By 1983. Brazil was producing 4.5 bil-lion liters (nearly 1.2 hiilion gallons) ofalcohol motor fuel in some 280 distiller-ies that dot the couttuysid.. (See Table9-6.) Supplying close to one-quarter of1 .. automotive fuel consumed. thesewitslleries are supplanting the oil refin-eries on which Brazilians traditionallydepended."' Cars run on alcohol both incombination with gasoline and by itself.Initially Brazil exploited the ability ofconventional engines to burn a gasoline-alt ohol mix containing up to 20 percentalcohol without adjustment. At the sametime the government required automak-ers to begin i.roductng automobiles with

elute rnobek's Future (t67)

Table 9-6. Brazil. Estimated Prodt 'on ofAlcohol Fuel from Sugarcane, 1976-83,

With Projections to 1985'

rearAlcohol

Fuel

(millionliters)

CroplandRequired'

(thousandhectares)

1970 175 471971 238 641972 413 1121971 286 771974 175 47

1975 175 471976 175 471977 636 1721978 1,510 081970 2,210 597

1980 2.591 7001981 1.036 8201982 4.165 1.1261983 4.546 !.229

1985 9.173 2.479I Worldwatch Institute etitmates dented from

published figures and oth(oal projection.. *Crop-laial area bated on 1980 cane yields and an alcoholtont ersion rate of 3,700 liters per hectaresummer World Energy Indusit v. Thr burp Decade1970-80 (Cambndge. Mass . Ballinger publishottgGo . 1982). Journal of Comoseser. April 5. 1983:Worldwatch Instetute estimates.

engines designed specifically to rur onalcohol. By early 1981 a majority of newcars purchased in Brazil had alcohol fuelengines and well over a million hectares(1 hectare equals 2.47 acres) wereplanted to sugarcane for the productionof alcohol.

The United States is the second larg-est alcohol-fuel producer. Although theU.S. Government has abandoned the1985 production goal of 2 billion gallonsthat was established in 197q, some 375million gallons of alcohol fuel were pro-duced in 19'_'3. accounting for 0.5 per-cent of national auto fuel consumption.Most of this came from corn and is used

183

(168) Stair of the world -1984

as an octane enhances, mixed in smallquantities with conventional gasoline. Inagricultural terms, this required 135 mil-lion hushels of corn (nearly 2 percent ofa typical U.S. harvest) and 1.3 millionacres, which is 0.4 percent of U.S. crop-land. (See Table 9.7.) The United Statesproduced about one-fifth as much alco-hol fuel as Brazils°

In China, which has only one-tenthof a hectare of cropland per per-son, there simply is no room forcars.

Es entually the relative contrihutionsof nu reused fuel efficiency and alterna-tne fuels will gradually shift toward thelatter as the potential efficiency gains arewrung out of the automotite system.Thus far, however, the adjustment be-tween the potential excess of worldwidedemand for automotive fuel over theavail.thle supply has been achievedlargely through reducing demand ratherthan through producing new fuels. Andfor some titne to come fuel efficiencygains will remain far cheaper than devel-oping alternathe fuels. Indeed, with thegains in efficiency that have yet to be

realized, this approach is likely to con-tinue to dwarf the contribution of alter-native fuels hetween now and the end ofthe century.

A TIME OF REASSESSMENT

As indicated, most projections of theworld automobile fleet have assumedthere would be dramatic growth over theremainder of this century. Typical ofthese is an Organisation for EconomicCo-operation and Development studycompleted in 1979 that projected worldautomobile ownership would expand ata steady 3 percent per year during theeighties and nineties, nearly doublingfleet size by the end of the century. DavidBayliss, ttansport planner for theGreater London Council, has compiledthe results of 18 studies, all but three ofthem done in the eighties, that projectannual automobile sale:, co the year2000. The highest projected for thatyear is 72 million, in a study completedin 19-8. This would be more than dou-ble the peak figure of just under 32 mil-lion in 1978 and close to triple the 27million sold in 1983. At the low end ofthe spectrum is a 1983 study that pro-

Table 9.7. United States: Production of Fuel Alcohol From Corn, 1980-84

Corn Usedfoe Fuel

Year' Alcohol

; '. 4"( ti I ot.5- bushels))

1980 ;. 13

11)81 e 331982 8019834 ;t 13511)84$ .' IVO

IFescaf car ei ' g Ottaber 1 of sear shown. 'Assumes lield of 105 bushels p& acre.alcohol is marketed as gasohol glerelimitiar!. estimate Projectionsot acts r iiptiblished data front t'S1)1 Pa nomic Research Service, Worldwatch Institute.

Area inCorn for

Fuel Alcohol'

FuelAlcohol

Production'

(millionacres)0 140.330,761.2$1.52

(million,gallons)

6 58I! 83i Z0

375440'All fuel

1S4

Ileionsidering the Automobile's Future ( 169 t

jested 46 million cars would be sold atthe end of the century. an increase of 70percent over 1983 sales.31

Even studies done after the 1979 oilprice sncrease show continuing substan.tial growth in the world automobile fleet.The average of the set of projectionssummarized by Bayliss anticipates 550inillion cars by the end of the century, anincrease of nearly four-fifths vs er 1980.Associated with this would he growth inannual sales from about 30 million in1980 to 42 million in 1090 and 56 mil-lion in the year 2000.32

Unfortunately, most projections arehased on a mums set of cons entionalassumptions that exc hide the manyfactors shaping the automobile's fit. ture.Few, for example. appear to bane ac-counted fulls for the cost of developingalternative filch. Nor have any pelt se-rious consideration to the equity issuesarising as the changing economic out-look permanently limits automobileownership to a small elite in most «inn-tries in Eastern Europe and the ThirdWorld.

Although initially questions ahout thefuture of the automohile arose from thesharp increase in fuel costs an 1973. dur-ing the following decade numerousother factors led go%ernments and in-dividuals to reexamine the role of theautomobile. These other infinences onthe auto's future include land availabil-ity. the cost of vehicle ownership andmaintenance. the saturation of sonicmarkets, the slowdown in economicgrowth both globally and in particularMURALS that void(' otherwise de%elop anauto manufacturing sector. the extent ofinternational indebtedness, urban trafficcongestion and air pollution. and a de-dine in the status tradinonally accordedauto ownership.

Fuel costs influence the was nationalpolicymakers as well as potential ownersthink about the automobile. At the na-tional loci go% ernments are concerned

with how fuel costs boost foreign ex-change outlays if the country is amongthe overwhelming majority that importoil. At the individual level, fuel costs arean important expense and when theyrise faster than real int cone they discour-age auto use and ownership. And that'sjust what they are expected to do. Thecost in real terms has risen markedlyos er the past decade and it is projectedo continue to rise throughout the rest ofthis century. Although there may heshortterm declines in world oil prices.as in 1983, the long-term trend is dearlyupward.

An autontohile-centered transporta-tion sy stem is land-intensive. Parking asubcompact requires a 10 -by -20 -footplot of land. so a parking lot to accom-modate 200 vehicles requires an acre. Inaddition to needing several parkingspots per automobile, land is requiredfor streets. roads. and highways. In somedensely populated countries there issimply not enough land to support afleet of automohiles. In China, for exam-ple. which has only one-tenth of a hect-are of cropland per person. there siniplyis no room for cars. This is one reasonwhy China. which exports a million bar-rels of oil a day. has virtually no privateatnomobiles.33 Other areas unable to de-s clop a full - fledged auto-centered trans-portation system because of land short-ages include Bangladesh. Egypt. and heisland of,Java, where most Indonesianslive.

Only relatively affluent individuals canafford to purchase and operate an auto-mobile. Without awincome well ahosethe world average. such a costly trans-portation %chicle is just far beyond therange of consumers. Until recently, itwas widely assumed that income levels"throughout the world would continue torise rapidls lot the indefinite future. thusbringing cars within the range of moreand more people. With the slowdown inglohal economic growth. howeser, par-

185

11701 State of Me World-1984

ocularly suite 1979. gams in per capitaincome have been modest. creating fewnew automobile owners.

At the affluent end of the economicspectrum, some national markets arebecoming saturated with automobiles.The United States. for example. is ap-proaching market saturation, with morethan half as many cars as people, So. too.are other affluent industrial societies.such as K est Germany, France, andItaly, with an average of one car for everythree people. (See Table 9 -8.) TheUnited Kingdom and Japan are alsoprobably nearing the saturation point.oartly for space reasons. Most ThirdWorld countries. on the other hand, are

far from saturation. Mexico. an oil ex-porter. has one car for every 21 peoplewhile Brazil, an oil importer, has one forevery 16. For the world as a whole theaverage is 14 people per car, a figure thatis a far cry from either 2 people per carin the United States of 18,000 per car inChina.

As economic growth slows, so doesthe growth in public revenuesthe verymonies needed to create the infrastruc-ture of streets, roads, highways, andbridges needed to support automobiles.With national budgetary deficits on therise almost everywhere, public outlaysfor such things will be harder to comeby. Likewise, slower growth will make it

Table 9.8. Prevalence of Passenger Cars in the Twenty Most Populous Countries, 1981

Comas PopulationPassenger CarRegistrations

PeoplePer Car

(thousand) (number)

United States 232 121,724 2Nest German 62 23,236 3

Hance 54 19.150 3

It* 571. 17.696 3

:tilted Kingdom 56 15.438 4

Japan 119 23.660 5

Brazil 128 8.213 16

Mexico 71 3,360 21

Soviet Union 270 8.255 33Iran 39 1.028 38

TurLes 48 711 68Philippines 52 550 95

Egypt 45 428 105

Thailand 50 435 115Nigeria 82 500 164

sIndonesia 192 637 239Pakistan 1$3 264 352India 714 930 768BangIadrilt 93 22 4,227China 997 55 18..37

World 1,585 320.513 14

sill acts Motor Vehicle Manufacturers Assoc..dion. IVerid Mew rthatle Pala Book 1982 Edition (De-(rum Mich !Mt, Population Reference Bureau,i9e1 rtior14 Popul4slion Data Sheet(Washington D C.19M1) 4- silt/

Rerofmtienng the Automobile's Future (171)

more chfinult for the prvate UAW! toaniass capital for investment in newmanufacturing capacity.. especially onthe scale needed if sales are to double by2000.1n commies where fleet expansionis projected. additional capital will be re-quired for investment in dealerships.service stations. and repair garages.

The growth in international indebted-ness during the late seventies and theearly eighties. which reached an astro-nomical $750 billion during 1983, isconcentrated in Eastern Europe and theThird World. in precisely those coun-tries where the growth in autos is pro-jected to be greatest." Heavily bur-dened with deist. many of these nationscan no longer afford to import oil for anever-expanding automobile fleet. In-deed. among the conditions often im-posed by the International MonetaryFund to assist governments with foreignexchange deficits is a higher price or taxon gasoline. In short. for many countriesthe existing international debt situation.which is likely to dominate national eco-nomic policies and priorities well intothe nineties. Is not conducive to the con-tinuing evolution of an automohile-cen-tered transportation system.

Countries that export petroleum aswell as those that import it are reassess-ing the autoinobiles future. Underprodding from the international Mone-tary Fmul to boost federal revenues andreduce domestic oil use. the MexicanGovernment raised gasoline pricessharply in 1983. Although the new priceof 700 per gallon for regular gasoline (atthe (Mica exchange rate) was still lowby intertiational standards. it repre-sented ck sixfold increase in peso termsfrom tilk price at the beginning of 1983.1'011141y unpopular though it was, thisraising of gasoline prices closer to worldlevels helped reserse the trend in oilconsumption. which had grown some 10percent per year from 1976 through1981. Brazil was also forced to raise the

pm e of gasoline in mid-1983. by 40 per-t mu. before die Fund would agree toprovide assistance."

Heavily burdened with debt, manynations can no longer afford to im-port oil for an ever-expanding au-tomobile fleet.

In an effort to reduce oil in ipons andmaintain its international tredit-worthi-ness. Yugoslavia adopted a nitioningsystem in 1982 that litnited motorists to13 gallons per month. Poland. which isin arrears in Interest payments on its in-ternational debt and which imports oil.has adopted stringent controls on gasp.line use. In tare 1983. gasoline purchaseswere rationed to 9 gallons per month.not nearly enough to permit regularuse."

Questions of equity also arise in con-sidering the ['mule of the autontohile.Although owning a car is essential to theexisting life-styles of ruling elites in theThird World, it will becoute more andmore difficult to justify the use of a largeshare of a country's foreign exchange toimport fuel, parts. or even new vehiclesthemselves. Earlier, when it could be as-sumed that rapid economic growthwould conninw exponentially. it wasreasonahle to think that ;lieu peoplewho wanted a car would eventualli ownone. regardless of where they lived. As itbecomes clear that this is not a reason-able prospect. then the use of the technology itself. which is elitist in n4tqfp,.will be increasingly questioned. ' 1.1

Yet another constraint on atiloS isgrowing urban traffic congestion. Lang aproblem in the countries that first turnedto the automobile. it is now a cause forconcern in many Third World cities aswell. Monumental traffic jams that can

187

1172)

last for hours oit in regularly in MexicoCity. Lagos. and Bangkok. Ait pollution.too. is a serious problem. particularly inthe Third World. Seoul and Mexico Citynow reportedly have sonic of the worstair pollution fotid anywhere. largely be-cause of auto emEsions. The combina-tion of traffic congestion, traffic noise,and air pollution has led many cities toimpose restrictions on the use of au-tomobiles. These range from increasedbridge tolls, as in Manhattan. to restric-tions on cars carrying onl one person.as m Singapore.

Even some industrial societies. partic-ularly those that import oil, are begin-ning to base second thoughts about thelitture of the automobile. Prominentamong the affluent societies that arereexamining their attitudes are Denmarkand Sweden. For Danes, who pay fortheir imported oil largely with farm pro-ducts, the shift in the terms of trade be-tween oil and agricultural commodities.described in Chapter 1. has beeneconomically devastating. If the Danishauto fleet continues to grow, further in-creasing the demand for imported oil, itcould so weaken the economy that a de-cline in living standards might be inevi-table. to avoid this unhappy possibility.Denmark has adopted a number of poli-cies to discourage private automobileownership, including a high tax on gaso-line and s:iff parking fees for motorists.In addition, the Danish Government ha4launched a campaign to educate peopleon the national economic dangers ofcontinuing to rely heavily on privatecars. As public undorstanding rises, autoownership has become socially less de-sirable. leading to a decline in the auto-mobile fleet, the first national decline onrecord. Since 1979, when the Danish au-tomobile fleet totaled 1.42 million au-tomobiles. it has fallen to 1.36 million. adrop of home '3 percent.37 (See Figure9-63

State of Mt WorldI984

Million3

Stealers

Denmark

Source: Motor VehicleManufacturers Assn.

i965 107u 1975 1980 1985Figure 94. Automobile Registrations, Sweden

and Denmark, 196542

At the same time that it is discourag-ing automobile ownership, the DanishGovernment has stepped up investmentin public transport, with bus registra-tions increasing by over one-third be-tween 1973 and 1981.38 The goal hasbeen to provide speedy, convenienttransportation that is cheaper than thatprovided by automobiles, thus reducingnew car purchases below the number ofold cars retired.

Sweden has also acted vigorously todiscourage the growth in automobileownership. After increasing steadilyfrom mid-century until 1976, growth inthe Swedish auto fleet has stopped, re-maining essentially static through1981.39 It seems likely that over time theforces that halted the growth of the auto-mobile fleet will intensify and lead to agradual decline.

At the other end of the income spec-trum, Peru demonstrates rather graph-ically the changes that can occur in theoutlook for the automobile in the ThirdWorld. Over a decade ago, Peru signeda pact with other Andean countries toproduce automobiles, with each countryproducing certain of the basic compo-nents and with final assembly beingdone domestically. In Peru, which hadbeen manufacturing an average of 17,-000 cars per year in the late sixties, this

188

Reromidering the Automobile's Future (173)

led to an ma ease to osei 34,000 by1976.4° (See Figure 9-7.)

At this point. several economic prob-lems brought the growth in productionto a halt. Among other things, the col-lapse of the country's anchos) fisherysharpy reduced the foreign exchangeavailable to import oil. Shottly there.after the international Monetary Fundrequired a sesere restriction in con-sumer credit as a condition for addi-tional loans. lit 1979 the gasoline pricewas doubled. Real incomes us Peril werenot increasing during this period. in-deed, in some years economic growthwas fading to keep pace with populationgrowth. Between 1976 and 1978. auto-mobile production fell to just over 11..000 vein( les. By 1981 it had recoveredsomewhat, to ()set 20,000 vehicles, butthe future of the nulustis is nonethelessin question 41

There are many reasons to questionwhether automobile production in Peruwill eser be significant. Indeed. does itmake sense for Peru to continue to de-setup an automobile industry ? It mightfare bow: if it abandoned the automo-bile-t entered industrial developmentmodel and shifted its resources into sm h

1 hot sand411

Source Motor EA&Mantspriuteli Ain

I I I19 35.70 1971 197 5 198111982

Figure 94. Motor Vehicle Productionin Peru. 1965-81

sectors as agriculture, renewable energyindustries, and educationactivitiesthat would bet... -. more of the popula-tion.

It is quite possible that at the end ofthe ( entury a number of countries willbase even fewer automobiles than theyl 0 today. Others may join China andban the private automobile except inspecial situations. Although some coun-tries, principally oil exporters, may seekto expand their fleets rapidly, others maybase second thoughts about investingheavily in a technology that depends ona nonrenewable resource. Accordingly,they may shift their emphasis toward thedevelopment of rail- and bus-centeredtransportation systems. Such a movewould also facilitate more-efficient landuse, itself an issue of widening concern.

Already, many forward-looking nastional governments are following thelead of Denmark and Sweden in devisingpolicies to discourage auto.centeredtransport systems. Some are using a gas-oline tax very effectively for this pur-pose: in several European countries, thetax on gasoline exceeds the value of thefuel itself. In other countries, where theprice of gasoline is set by governmenteither because of a state oil monopoly orpublic sector dominance (such as Mex-ico or the Soviet Union), the price ofgasoline has been raised to discouragecar purchases. A number of Third Worldcountries that import automobiles, suchas Kenya. are resorting to a stiff importduty, one that sometimes exceeds themarket value of the vehicle. The Interna-tional Monetary Fund, in its attempt topromote international monetary stabil-ity, is also urging higher taws on gaso-line as a way to supplement marketforces that promote reduced depen-dence on imported oi1.42

Each country must decide what placethe automobile will occupy in its trans-portation system in the post-petroleum

189

(174) State of the World-1984

age, since no two fate exactly the sameset of constraints. In some, the affluenceneeded to become a nation of auto own-ers may never materialize. Others maylack the foreign exchange earnings toimport oil to fuel a fleet of cars. Still

So

others may abandon private motor vehi-cles for reasons of equity. Collectively,these pressures suggest the time hascome for governments everywhere toreassess the future of the automobile.

10

Securing Food SuppliesLester R. Brown

Measured just in terms of output. thepast generation has been one of un-precedented progress in world agt icul-lure. In 19M the woi Id's farmers pro-duced 623 million tons of grain. In 1983they produced nearly 1.5 billion tons.This increase of neatly 900 million tonswas all the mot e remarkable because itm t urred.when there was lade new crop-land to bring under the plow.'

On closer examination this 33-earspan breaks into two distinct erasbe-fore and alter the 1973 nil price increase.Modern agriculture thrives on cheap en-ergy. and the age of cheap energy cameto an end in 1973. For 23 a; ears worldfood output expanded at over 3 percentper ye.tr and. although they e was con-cern about rapid population growth.there was a comfortable margin in thegrowth of food production over that ofpopulation. Since 1973e however. an-nual growth has been less than 2 percentand the world's farmers have been stntg-Ong to keep pace with population.

The global increase in world food °w-pm also obscures wide variations In indi-vidual geographic regions. In NorthAmerica. production has steadily out-stripped demand. generating ever-larger export surpluses. In the Soviet

Union. output has fallen behind demandover the past decade, making the coun-try the largest grain importer in history.And in Africa. which has a population of512 million and which has to feed 14million additional people each year,food production per person has fallensteadily since 1970. Despite a tripling ofgrain imports since then. hunger has be-come chronic, an enduring part of theAfrican landscape.

The 1983 drought il North Americaand Africa must be considered againstthis backdrop. The principal effect of theprecipitous decline in the North Ameri-can harvest was a reduction in stocks anda rise in food and feedstuff prices. InAfrica, where national food reserves arevirtually nonexistent. the drought trans-lated into widespread hunger and, in ascore of countries. the threat of famine.2

THE GLOBAL Loss OF

MOMENTUM

As the world recovered from World WarII, hopes for improvement in world agri-culture were high. An accumulating

151

(176) State of the World 1984

backlog of agricultural technologiessuch as hybrid corn and chemical :ertiliz-ers were waiting to be applied on a mas-sive scale. Between 1950 and 1973 worldgrain production more than doubled, tonearly 1.3 billion tons. Although outputexpanded more rapidly in some regionsthan m others, all regions shared in thegrowth. This rising tide of food produc-tion improved nutrition throughout theworld, helping to boost life expectancyin the Third World from less than 43years in the early fifties to over 53 yearsin the early seventies.'

This period of broad-based gains innutritional improvement came to an endni 1973. After the oil price hike that yearthe growth in world grain output slowed.Situ«. 1973 world grain production hasexpanded At less than 2 percent yearly,barely keeping pace with population.(See Table 10-1.) Although the periodsince the 1979 oil price hike is too shortto establish a trend, $30-a-barrel oil maywell slow growth further.

In per capita terms world grain outputch tsed from 248 kilograms in l950 to326 kilograms nn 1973, an impressivegam of 31 percent. (See Table 10-2.)Since then, however. annual grain out-put per person has remained around 325

kilograms. A global average, this figureembraces countries where yearly grainavailability per person averages only 150kilograms, requiring that it all be con-sumed directly, as well as countrieswhere it exceeds 700 kilograms and islargely converted into meat, milk, andeggs!

Since 1973 attention has focused onthe impact of petroleum prices on foodsupply, but demand has also beenaffected. On the supply side, rising oilprices have increased the costs of basicagricultural inputsfertilizer, pesti-cides, and fuel for tillage and irrigationthus acting as a drag on output. Onthe demand side of the equation, escalat-ing oil prices combined with in-con-ceived national economic policies havecontributed to a global economic slow-down so severe since 1979 that it hasbrought world growth in per capita in-come to a virtual halt. Had incomes con-tinued to rise at the same rate after 1973as they did before, prices of food com-modities would have been stronger, thussupporting a more vigorous growth infarm investment and output. Agricul-tural underinvesitnent in Third Worldcountries has also contributed t the lossof momentum, but the central point is

Table 10-1. World Oil Price and Crain Production Trends, Total and Per Capita,1950-83

"criodOil PricePer Barrel

(dollars/

GrantProduction

Annual Growth

Population

GrainProductionPer Person

{percent)

1950-73 2 3.1 1.9 1.21973-79 12 1.9 1.8 0.11979-83 31 1.01 1.7 -0.7

'Snerc though' in the Vtitied states and Africa and record idling of cropland under U.S. farmprograms redu,ed the 1983 world h,mcet well below vend. thus the slowdown in grain prodoictionis co erstatedsot acts. Internanonal Nionviar. Fund-Voorhis Miasmal Sinks* s. sallow issties.1.' S. Department ofAgri, ulnae. It'fild Indic" a/ *mull:era, arid hod Pram< hon. 1950-32 unpubtosIecl printout) (Washing-ton. 1) C.: 1983), Vinicd Nations. Aloorthls 801.1111 State.stra, various ',sties

192

Seeunng Food Supplies (177)

Table 10.2. World Grain Production,Total and Per Capita, 1950-83

YearPopulation

GrainProduction

GrainProductionPer Person

(billion) (millionmetric tons)

(kilograms)

1950 2.51 623 248

1955 2.74 751 274

1960 3.03 845 279

1965 3.34 920 275

1970 3.68 1.101 2991971 3.75 1.194 3181972 3.82 1.161 304_1973 3.88 1.268 3261974 3.96 1.222 309

1975 4.03 1.248 3101976 4.11 1.360 3311977 4.18 1.334 3191978 4.26 1.461 3431979 4.34 1.419 327

1980 4.42 1.440 3261981 4.50 1.491 3311982 4.58 1.540 3361983 4.66 1.447 310somas: U.S. Department of Agriculture. WorldIndica of ilgnadlural and Food Produam, 1950-112(unpublished printout) (Washington. D.C. 1983):United NationsVox:MO Bulky: of Slaltatts. NewYork. various issues.

that the rise in oil prices. affecting bothfood supply and demand, has broughtthe era of robust growth in world foodoutput to an end.

Oil is not the only resource whosequestionable supply is checking thegrowth in food output. As discussed inChapter 4, the loss of topsoil througherosion is now acting as a dragon effortsto produce more food. And the scarcityof water is also beginning to affect foodproduction prospects. Since World WarII, the world irrigated area has morethan doubled, but the flurry of dam

building of the past generation has nowsubsided. With occasional exceptions,most of the remaining potential projectsare more difficult, costly, and capital-intensive.6

In some situations, irrigated agricul-ture is threatened by falling water tables.The southern Great Plains, where muchof the U.S. growth in irrigated area overthe last two decades has occurred, pro-v.;des a disturbing example. Irrigationthere depends almost entirely on waterfrom the Ogallala Aquifer, an essentiallynonreplenishable fossil water reserve.As the water table in this vast agricul-tural area begins to fall with the deple-tion of the aquifer. the cost of irrigationrises. Already some farmers in easternColorado and northern Texas are con-verting to dryland farming. For the 32counties in the Texas Panhandle, theU.S. Department of Agriculture projectsthat irrigation will be largely phased outby 1995.6

A somewhat analogous situation existsin the Soviet southwest, where the exces-sive diversion of river water for irriga-tion is reducing the water level of theAral and Caspian seas. This has manylong-term negative consequences. in-cluding a diminished fish catch and thegradual retreat of the water line fromcoastal cities that depend on it for trans-portation.? Given the strong internalpressures within the Soviet Union toproduce more food, however, the diver-sion is continuing.

A second major threat to irrigated ag-riculture is the often intense competitionfor water between farming, industry, andcities. In the U.S. Southwest, the irri-gated area is actually declining in statessuch as Arizona, where Sunbelt migra-tion is swelling cities that are biddingwater away from farmers. In agricultur-ally important Maricopa County, whichhad some 550,000 acres under irrigationin the fifties, the irrigated area hasshrunk by more than one-fifth.* Nation-

193

(578)

ally the net area under irrigation is pro-jected to continue growing over the restof the century, but at a more modestrate.

New research indicates water scarcit-ies are also emerging in Africa. SouthAfrica, adding 720,000 people each year,is fast running out of new irrigation sites.A 1983 report of the President's Councilin South Africa identified the scarcity offresh water as a constraint on that coun-try's demographic carrying capacity.9

The worldwide loss of momentumoutlined above will not be easily re-stored. Although agricultural misman-agement abounds, particularly in theThird World and Eastern Europe, it hasnot worsened appreciably over theyears. Nor can the situation be explainedby any farmers' loss of :kills. The expla-nation lies in the more difficult circum-stances facing farniers everywhere. Inthe mid-eighties it is far more difficult toraise world food output at a consistent 3percent per year than it was during thefifties or sixties. The cheap energy thatpermitted farmers to override easily theconstraints imposed by the scarcity ofland, soil nutrients, or water is simply nolonger available.

Slate of the World I 984

Kilograms$0

THE POPULATION/LAND/FERTILIZER LINK

The changing relationship betweenworld population size, cropland area,and energy supplies bears heavily on thehuman prospect over the remainder ofthis century and beyond. Increasingly,the energy used in agriculture will be inthe form of chemical fertilizer. As popu-lation grows, cropland per personshrinks and fertilizer requirementsclimb. And erosion that has robbed soilsof nutrients is forcing farmers to use

194

1950 1960 1970 1980 1985Figure 104. world Fertiliser Use and Grain

Area Per Person, 195043

more fertilizers. Even urbanization israising demand, since as people move tocities it is harder to recycle the nutrientsin human and household waste. Yet thecombination of rising energy costs anddiminishing returns on the use of addi-tional fertilizer raises doubts that ade-quate food supplies can be produced inthe future at prices the world's poor canafford.

The central importance of the popula-tion/land /fertilizer relationship is a re-cent phenomenon. Before 1950 in-creases in food output came largely fromexpanding the cultivated area, but withthe scarcity of fertile new land and theadvent of cheap chemical fertilizer thischanged. Between 1950 and 1983 world .

fertilizer use climbed from 15 million to114 million tons, nearly an eightfold in-crease within a generation.19 In effect, asfertile land became harder to find, farm-ers learned to substitute energy in theform of chemical fertilizer for land. Fer-tilizer factories replaced new land as theprincipal source of growth in food pro-duction.

This substitution of energy for land isgraphically evident; In 1950, when worldpopulation totaled 2.51 the har-vested area of cereals per person was0.24 hectares. (See Figure 10-1.) As

Securing Food Supplies OMgrowth in population greatly out-stripped that of cultivated area, the areaper person fell steadily, declining to 0.15hectares by 1983. While the amount ofcropland per person declined by one-third. the fertilizer consumption per per-son quintupled, climbing from just over5 kilograms in 1950 to 25 kilograms in1983.

While the amount of cropland perperson declined by one-third, thefertilizer consumption per personquintupled.

The hybridization of corn and thedwarfing of the wheat and rice varietiesthat have been at the heart of ThirdWorld agricultural advances over thelast two decades figured prominently, ofcourse. in the growth in world food out-put. So, too, did the doubling of irri-gated area. But the effectiveness of allthese practices depends heavily on theuse of chemical fertilizer. Without an ad-equate supply of plant nutrients, high-yielding cereal varieties hold little ad-vantage over traditional ones. Likewise,

an increase in irrigation is of little conse-quence if the nutrients to support thehigher yields are lacking.

The response of crops to the use ofadditional fertilizer is now diminishing,particularly in agriculturally advancedcountries. During the fifties. the applica-tion of another ton of fertilizer on aver-age yielded 11.5 more tons of grain. (SeeTable 10-3.) During the sixties, the fer-tilizer/grain response ratio was 8.3 to 1.By the seventies it had fallen to 5.8.Some countries, such as Argentina andIndia, still apply relatively little fertilizerand so have quite high response ratios.But worldwide the return on the use ofadditional fertilizer is on the way down.Although the biological constraints onfertilizer responsiveness can be pushedback with continued plant breeding, fur-ther declines seem inevitable.

Fertilizer manufacturing is one of theworld's major industries. In an advancedagricultural country such as the UnitedStates, expenditures on fertilizer totalsome $10 billion per year.33 Three basicnutrientsnitrogen, which is obtainedfrom the air, and phosphate and potash,both mined from underground depositsaccount for the great bulk of worldchemical fertilizer production. The in-

Table 10.3. World Grain Production and Fertilizer 1.1ae, 193448 to 197941

WorldGrain

Period Production'

WorldFertilizer

Increment Use'

IncrementalGrain/Fertilizer

Increment Response Ratio

(million metric tons) (ratio)

1934-38 651 101948-52 710 59 14 4 14.81959-61 848 138 26 12 11.51969-71 1.165 317 64 38 8.31979 -81 1.451 286 113 49 5.8

'Annual average for period.sonnets: 1934-38 data from United Nations Food and Agriculture Organization (FAQ). ProductionYearbook (Rome: various years): U.S. Department of Agriculture (USDA), Work! Indues of 40mM:ratand Food Prodteuon, 1950-82 (unpublished printout) (Washington, D.C.: 1083): FAO, Pet0 1977Annual Peruluer Renew (Rome: 1078): 1979-81 data from Paul Andrilenas, USDA, private cotnmunicalion, December 1982.

195

(18o) State of the R'orld -1984

dustrial fixing of atmospheric nitrogenin the form of ammonium nitrate, am-monium sulphate, urea, or other formsof nitrogen fertilizer is an energy-inten-sive process. Although natural gas is thepreferred fuel and feedstock in the nitro-gen fertilizer industry, oil figures promi-nently in the mining, processing, andtransportation of phosphate and potash.

High energy prices have begun to shiftnitrogen fertilizer production from thetraditional industrial country producers,such as the United States and some inWestern Europe, to countries with en-ergy surpluses. Investment in this indus-try has been particularly attractive to oil-exporting countries that are flaringexcess gas produced in conjunction withoil. To the extent that fertilizers aremanufactured in countries such asSaudia Arabia. Iran, or Kuwait with gasthat would otherwise be wasted, futureprice increases may be curbed. The So-viet Union, in a situation similar to thegas-surplus countries in the Middle East,is also investing heavily in nitrogen ferti-lizer production capacity.it

The distribution of phosphate rock,the principal source of phosphate fertili-zer. poses a particular problem since re-serves are concentrated in Florida andMorocco. With production concentratedaround the Atlantic but with the world'spopulation and future needs for phos-phate mainly in Asia, high transporta-don costsand thus high fertilizerprices in Asian villagesare inevitable.

With population growth projected tocontinue, the cropland available per per-son will continue to decline and the ferti-lizer needed to maintain consumptionwill continue to rise. At some point, bio-logical constraints on crop yields willmake the substitution of fertilizer forcropland increasingly difficult andcostly. When this is combined with theprojected long. term rise in real cost ofthe oil and natural gas used to manufac-ture, distribute, and apply chemical fet ti-

196

lizer, the difficulty in restoring the steadyupward trend in per capita grain produc-tion of 1950-73 becomes clear,

REAL PRODUCTION TRENDS

When measuring growth, economistsadjust current prices for the rate of infla-tion in order to distill out the real gainsin production. Something similar isneeded in agriculture, where growth inoutput is inflated by agricultural prac-tices that are not sustainable. Such anadjustment would shed light on thelonger-term outlook by distinguishingbetween gains that are real and thosethat are made at the expense of futureoutput. For example, as farm commodityprices climbed in the mid-seventies U.S.farmers brought land under the plowthat was not suited to cultivation. By1977 the Soil Conservation Service hadidentified 17 million acres of land incrops that were losing topsoil so rapidlythey would eventually be stripped of allproductive value. The agency recom-mended that farmers convert this land tograss or forests to preserve its produc-tion capacities.is To reach a figure ofreal, not just current, U.S. agriculturaloutput, the yield from these, 17 millionacres, roughly 4 percent of thi U.S.cropland total, should be subtractedfrom overall output.

Similarly, adjustments should bemade for the output from sloping landthat was once in ecologically stable,long-term rotations of row crops withgrass and hay but that is now in rowcrops continuously, for topsoil loss inthese situations has become excessive. IfAmerican farmers were to take the stepsneeded to protect their topsoil, U.S.farm output and exports would be sub-stantially less in the short run, but theywould be sustainable over the long term.

.Seeuring Food Supplies

Elimination of this agronomic deficitthrough a national soil conservation pro-gram that reintroduced the traditionalpractices cited above might also elimi-nate the troublesome short-term com-modity surpluses that depress farmprices and income.

In addition to agronomic deficits,many of the world's farmers are also in-curring economic deficits. Nowhere isthis more evident than in the UnitedStates, where net farm income has nar-rowed almost to the vanishing point. Be-tween 1973, when the world oil pricebegan its astronomical climb, and 1982,farmers were caught in a squeeze be-tween depressed commodity prices andthe soaring costs for fuel, fertilizer, andequipment combined with high interestrates.

In 1982, many American farmers soldtheir products for less than they cost toproduce. The U.S. Department of Agri-culture reported that the average pricereceived by farmers for broilers in thatyear was below the cost of production.Many farmers also sold wheat and cornfor less than the production cost. Formany, profit margins had virtually disap-peared by 1982. (See Figure 10-2.) Be-tween 1950 and 1982, U.S. farm outputmore than doubled, but net farm incomein real terms (1967 dollars) fell from $19billion in 1950 to scarcely $6 billion in1982.14 This precipitous decline oc-curred while the incomes of otherAmericans were rising steadily.

Farmers were able to sustain the heavylosses of the late seventies and earlyeighties only by going deeply into debt,borrowing against soaring land values.But the boom in land speculation cameto an end in 1981 and land prices fell thefollowing two years. As a result, manyfarmers suddenly lost their equity andfared bankruptcy.

Economic conditions fostering specu-lation in land have driven land value:, toa lofty level that bears little relationship

,

BillionDollars

(l81)

1950 1960 1970 1980 1985Figure 104. V.S. Farm Income, Gram and Net,

195043

to the land's productive capacity. Giventhe economics of the early eighties, buy-ing U.S. farmland now with the hope ofpaying for it from the produce would bewishful thinking. Say, for example,someone had invested in prime mid-western farmland at $2,000 an acre in1981 and planted it in corn that yielded110 bushels per acre. With a mortgage at15 percent, the annual interest paymentwould be $300 an acre. Yet at the 1981price of $2.40 a bushel, the total incomefroth each acre would have been $264,not enough to pay the interest, muchless the principal or any of the produc-tion costs.

Nevertheless, it was these spiralingland values that until 1981 enabled manyfarmers to borrow and to stay in busi-ness. While net farm income has de-clined markedly, farm debt has soared.As recently as 1973, net farm income ex-ceeded $30 billion compared with a farmdebt of $65 billion, a ratio of roughlyone to two. (See Figure 10-3.) By 1983,net farm income totaled $22 billionwhile the farm debt had climbed to $215

-,;

(182)

BillionDollars

225

20°-

150 -

100 -

50 -

Slate of the Worid-1984

most countries. And it is difficult to measu the extent to which farm output hasbe n inflated in recent years by thegr wing indebtedness of farmers. Ifth e adjustments could be made, how-ever, it seems clear that the real worldfood output would be far below currentconsumption.

Sower: Council ofEconomic Advisors Farm

Debt

Net FarmIncome

1950 1960 1970 1980 1985

Figgre Ws. U.S. Farm Debt and NetFarm Wow, 195043

billionclose to ten times income.isAs farmers have borrowed against the

soaring prices of their land and otherassets. not only have they supportedthemselves and their families, they havealso suhsidized food consumers every-where. Borrowing against the inflatedpaper value of fat inland has led to artifi-cally low food prices in recent years. Andjust as productivity increases cannot goon forever when topsoil is being eroded.borrowing that is unrelated to the realvalue of the land cannot continue indefi-nitelya lesson many rural banks andfarmers are unfortunately learning. Iffarmers are to continue to produce,orices of farm products will need to rise.Without such an 'increase. the more vul-nerahle farmers and those who have at-tractive employment options or who areapproaching retirement will stop pro-ducing. eventually reducing output andtnoving prices upward to a more realisticlevel.

Although U.S. data might allow theconversion of current farm output toreal output by adjusting for soil erosion,similar information does not exist for

DEPENDENCE ON NORTHAMERICA

With grain. as with oil or any other basicresource, excessive world dependenceon one geographic region for supplies isrisky. As the North American share ofworld grain exports has increased it hassurpassed the Middle Eastern share ofoil exports and made the world moredependent on one region for its foodthan ever before.

This extraordinary dependence onone geographic region for grain suppliesis a historically recent phenomenon andgives North America a politically andeconomicaily strategic role in the worldfood economy. Many of the world's cities, particularly those in the ThirdWorld, are fed largely with U.S. and Ca-nadian wheat. Much of the world's milk,meat. and eggs are produced with U.S.feedgrains and soybeans.

As recently as the late thirties, West-ern Europe was the only grain-deficit re-gion and Latin Am.:nca was the world'sleading grain supplier, exporting somenine million tons per year. North Amer-ica and Eastern Europe (including theSoviet Union) each exported five milliontons of grain annually. Even Asia andAfrica had modest exportable sur-pluses.16

By 1950, the shift from regional grainsurpluses to deficits was well under wayand the outlines of a new world grain

198

SOftMlig Food Supplies (183)

trade pattern were beginning to emerge.Today, with North America's unchal-lenged dominance as a grain supplier,international grain trade bears little re-seinhlance to that of the thirties. (SeeTable 10-4.)

As North American agriculturalgrowth gained momentum after WorldWar H. U.S. and Canadian exports ofgrain climbed from 23 million tons in1950 to 138 million tons in 1982, thoughthey dropped back t o 122 million tons in1983 as a strong dollar and lethargicworld economy weakened the buyingpowers of other countries. Feedgrainsprincipally corn, sorgleim, and barleyhae made up an ever Erger share of thetotal. Today, North America is not onlythe world's breadbasket, but its feed bagas well-

While the United States was expand-ing its fecdgrain exports, the shipmentsof soybeans grew evenynore rapidly. Al-though soybeans originated an Chinathey have thrived in the United States,doing far better than in their country oforigin. They have also found an eco-nomic niche in the world livestock econ-omy, with soybean meal becoming theprincipal protein supplement in live-stock and poultry feed. Today theUnited States produceb over 60 percentof the world's soybean crop and ac-counts for two-thirds of soybean ex-

ports. (See Table 10 -5.)The reasons for North America's

emergence as the world's dominant sup-plier of feedgrains and feedstuffs aremany, On the supply side, the UnitedStates inherited a prime piece of agricul-tural real estate. In contrast to LatinAmerica, where agricultural lands areconcentrated in the hands of large had-enda owners, or Eastern Europe, wherestate farms and collectives dominate,U.S. and Canadian agriculture are cen-tered on the family farm. Although largeby international standards, they arenonetheless family far.ns and have allthe attendant advantages of a strong linkbetween effort expended by those work-ing the land and the rewards of doing so.

North America is not only theworld's breadbasket, but its feedbag as well.

The restructuring of world grain tradeover the last generation has resulted inpart from the soil erosion problems dis-cussed earlier and in part from differen-tial population growth rates. as a com-parison of North America and LatinAmerica shows. During the late thirties,Latin America had a larger grain export

Table 104. The Changing Pattern of World Grain Trade, 1950-831

Region 1950' 1960 1970 1980 19833

(million metric Inns)

Minh America +23 + 39 + 56 + 131 + 122Latin America + 1 0 + 4 10 3

Western Europe 22 25 30 16 + 2

E. Europe and Soviet Union 0 0 0 46 39Africa 0 2 5 15 20Asia 6 17 37 63 71

Australia and New Zeal. + 3 + 6 + 12 + 19 + 9

'Plus sign indicates net exports; minus sign. net imports. 'Average for 1948 -52. 9Prcliminary.sciences: United Nations Food and Agriculture Organization, Proiforiron Yearbook (Rome: variousYears); U.S. Department of Agriculture. Forerga Agneultare Crretdar, August 198S; author's estimates.

199

(184 State of the World-1984

Table 10.5. Soybean Exports, MajorExporting Countries, 1960-831

UnitedYear Slates Brazil Argentina

1960(million metric tons)

4,6

1965 8.1 0.2

1970 16.4 1.1

1971 17.0 1.61972 15.7 3.11973 18.5 3.61974 21.1 6.0

1975 16.4 8.0 0.21976 21.0 8.6 0.41977 20.5 9.4 1.01978 26.1 7.6 2.31979 27.7 7.1 3.2

1980 32.8 8.4 2.91981 27.5 19.0 3.21982 33.2 11.3 3.01983 32.5 11.5 2.8

'Beans pIus bean equivalent of meal.sovacc U.S. Department of Agriculture. ForeignAgriculture Circulars. June 1981, August 1982. andAugust 1983.

surplus than North America, but the re-gion's more rapid rate of populationgrowth soon changed this. Indeed, if theregions had grown at the satne rate since1950, North America's population in1983 would be so large that it wouldconsume the entire grain harvest, leav-ing little or none for export. And NorthAmerica, too, would now be strugglingto maintain food self-sufficiency.

Today the countries with significantexportable surpluses of grain can becounted on the fingers clone hand-theUnited States, Canada, Australia. Argen-tina, and France. Of these, the UnitedStates accounts for over half and withCanada covers close to 70 percent of theto`al. The rest of the world's depen-dence on these supplies varies widely. Afew countries, both industrial and devel-

oping, import more food than they pro-duce; among these are Algeria, Belgium,Costa Rica, apan, Lebanon, Libya, Por-tugal, Saudi Arabia, Switzerland, andVenezuela. Others that may shortlymove into this category include Egypt,Senegal. and South Korea.'

This overwhelming dependence onone region, and on one country in par-ticular, brings with it an assortment ofrisks. To begin with, both the UnitedStates and Canada are affected by thesame climatic cycles. A poor harvest inone is often associated with a poor har-vest in the other. When reserves are low,even a modest fluctuation in the region'sexportable grain surplus can send pricetremors through the world food econ-omy.

An inadvertent agricultural policymiscalculation can also be costly. Thiswas amply demonstrated in 1983 whenmiscalculations in the U.S. Departmentof Agriculture led to the idling of morecropland than had been projected,which was followed by a severe droughtthat further reduced harvests. Within amatter of weeks, concerned countrieswatched the world grain surplus changeto a potential grain deficit. The U.S. corncrop was cut in half, effectively eliminat-ing the world feedgrain surplus. A simi-lar miscalculation in 1972, when recordacreage of U.S. cropland was idled, con-tributed to the food shortages of the1972-74 period.'®

When food supplies are tight a NorthAmerican grain export embargo,whether economically or politically in-spired, can drive food prices upwardeverywhere outside the region. In 1973,

for example, President Nixon embar-goed soybean exports because of short-ages at home. Although this helped curbfood price rises within the United States,it worsened inflationary pressures else-where. During the same period, Ameri-can millers and bakers were pressing forrestrictions on grain exports, holding

200

Securing Food Supplies ( 185 )

out the prospect of soaring bread pricesif wheat exports were not restricted. Un-fortunately, the world market conditionsthat would lead a principal exporter torestrict outgoing supplies are preciselythe conditions that are most damagingto importing countries.

_

Some contend that the current gen-eration of farmers has no right toengage in the agronomic equiva-lent of deficit financing.

- -

In raid July of 1975. the CanadianWheat Board banned further exports ofwheat until the size of the harvest couldbe ascertained. Similarly, the UnitedStates, yielding to political pressuresgenerated by rising domestic foodprices, limited grain exports to the So-viet Union and Poland in the late sum-mer and early fall of 1975. Levied in1972, in 1974. and again in 1975, suchrestrictions on exports became commonwhen global grain supplies were tight.Perhaps more unsettling, these exportcontrols were adopted desnite the re-turn to production of the previouslyidled U.S. cropland.

As with oil, exports of grain have beenrestricted for political purposes. In1973. the Department of State compileda "hit list" of 1 hird World countrieswhose U.N. voting records were notcompatible with U.S. interests so thatthey could be denied food assistance.More recently. President Carter im-posed a partial embargo on exports ofgrain to the Soviet Union following itsinvasion of Afghanistan, and PresidentReagan delayed negt:tiattng a new five-year grain agreement with the SovietUnion after the imposition of martial lawin Poland.t9.

Countries that rely on North Ameri-

can food should take heed of the philo-so hical debate emerging within theUnited States about the wisdom of min-ing the nation's soils to meet the ever-growing world demand, Both agricul-tural analysts and environmentalistsargue that the country should makewhatever adjustments in its agricuituralpractices are needed to protect the re-source base. even though this would re-duce the exportable surplus. Someargue that it makes little sense to sac-rifice a resource that has been a source ofeconomic strength since colonial daysmerely to buy a few billion barrels of oil.And some contend that the current gen-eration of farmers has no right to engagein the agronomic equivalent of deficitfinancing. mortgaging the future of gen-erations to come. The current trend isfraught with risks, both for those whoselivelihoods depend on sustained landproductivity and for those in countriesdependent on food imports that eventu-ally will dry up if the mining of soil con-tinues. Even for the importers, reducedsupplies in the short term and less pres-sure on North American soils would bebetter than losing the region's export ca-pacity over the long term.

FOOD SECURITY INDICATORS

One of the most useful indicators of theworld food situation is the food securityindex, which incorporates both graincarry-over stocks and the grain equiva-lent of idled cropland. This combinesthe world's two basic reserves of foodand expresses them as days of consump-tion, a concept readily understood bypolicymakers everywhere. The two com-ponents of the index differ in importantways. Carry-over stocks, the grain instorage when the new crop begins tocome in, are readily accessible and re-

201

(186) State of the World-1984

quire only time for shipping arrange.ments to be made and for transport.Idled cropland, on the other hand, cantake a year or more to be converted intofood by fanners.

Carry-over stocks are held for themost part by exporting countriestheUnited States, Canada, Australia, Argen-tina, and Francelargely as a service toimporters. Other countries, particularlylarge ones such as India, maintain grainstocks as well, but these are usually de-signed specifically for their own use.India's grain stocks, typically rangingfrom 11-15 "million tons, were drawn

Table 10.6. India: Grain Stocks, 1963-83

Year'Beginning

Stocks

(million metric tons)1963 11.71964 12.21965 13.01966 14.31967 12.91968 14.71969 15.5

1970 10.51971 12.51972 13.91973 10.41974 9.2

1975 5.31976 17.31977 21.21978 21.71979 21.3

1980 15.21981 12.21982 12.71983* 12.4

'Beginning April I of year shown. sPrelirninary.SOURCES: U.S. Department of Agriculture (USDA).Foreign tigneultare Ortolan. May t976. July 1982.and June 1983: David Salmon and Tom Slayton,USDA, private communications, August 1983.

down to scarcely 5 million tons during1973-75, a time of poor harvests. (SeeTable 10-6.) After this harrowing experi-ence India adopted a target stock level of21-24 million tons as part of a beefed-upfood security system. Bumper harvestsin the late seventies helped the govern-ment achieve its target, but after stockswere drawn down to 12-15 million tonsduring the 1979-80 drought, New Delhihas apparently decided for reasons ofcost to maintain a more modest level ofgrain reserves.

Maintaining adequate grain stocks isexpensive not only because of the cost ofgrain elevators but also because storedgrain represents an investment. So wheninterest rates are high, the cost of carry-ing grain is also high. And even with thebest of storage facilities there is alwayssome loss involved, thus adding to thecost of maintaining the reserves.

Over time, for a reserve of grain to beadequate it should expand in tandemwith world consumption. In 1960, forexample, world reserves of 200 milliontons were more than ample, represent-ing nearly one-fourth of world consump-tion. In 1983, however, the same stockswould represent only one-eighth ofworld grain consumption. A level ofgrain reserves that was adequate in 1960would be grossly inadequate in 1983.

The idled cropland component of thefood security index consists of croplandset aside under farm programs just in theUnited States. Only occasionally haveother countries intentionally idled crop-land and the acreages have usually beennegligible. During the sixties and earlyseventies U.S. idled cropland averagedclose to 50 million acres, enough to pro-duce an estimated 60 million tons ofgrain. (See Table 10-7.) As growth inworld food output slowed after 1973, theUnited States returned cropland to pro-duction from 1974 through 1977 in anattempt to rebuild stocks. Then whengrain reserves began to recover in the

202

Year

Securing Food Supplies

Table 10.7. index of World Food Security, 1960 -83

Reserves

World GrainCarryOver Equiv. ofStocks of Idled U.S.

Grain Cropland Total

(187)

WorldConsumption

(million metric tons) (days)

1960 200 36 236 104

1965 142 70 212 81

1970 164 71 235 751971 183 46 229 711972 143 78 221 671973 148 25 173 501974 133 4 137 41

1975 141 3 144 431976 196 3 199 561977 194 i 195 531978 221 22 243 621979 197 16 213 54

1980 183 0 183 461981 221 0 221 5619821 260 13 273 6619832 191 92 283 68

'Preliminary. =Projection.souacts: Reserve stocks from U.S. Department of Agnculture (USDA). Forngn Agnadture Constar.October 1983: cropland idled in the United States data from Randy Weber. USDA. private communi-eatim. August 1983.

late seventies, some land was taken outof production in both 1978 and 1979.With reserves beginning to drop again in1979, all land was released for produc-tion in 1980.

The Reagan administration, wishingto reduce government intervention inthe marketplace, declined to idle anycropland in 1981 and only a modesacreage in 1982, even though world re-serves had been rebuilt following twoconsecutive bumper harvests in theUnited States and a worldwide economicrecession that dampened the growth indemand. In 1983, faced with the mostsevere rural depression since the thir-ties, the administration overreacted bydevising two programs to encourage

farmers to divert land to nonproductiveuses. The result was the largest diver-sion of acreage in U.S. historyover 70million acres. Combined with a severedrought in the principal U.S. feedgrainand soybean producing areas, this led toa precipitous decline in the feedgrainharvest of over 40 percent. This in turnreduced the prospective carry-overstocks to one of the lowest levels in someyeats.20

Whenever gran stocks and the grainequivalent of idled U.S. cropland dropbelow 50 days of world consumption,grain prices customarily rise and becomehighly unstable. In 1973 and 1974, whenthe index dropped to 50 and 41 days,grain prices were nearly double tradi-

203

(188) State of the World-1984

tional levels. The index again fell below50 days of consumption in 1980, partlyas a result of drought in the UnitedStates. This time, however, prices werenot nearly as volatile as before, perhapsin part because interest rates were at re-cord highs, making investors less in-clined to speculate in commodities. Bylate 1983, prices, particularly of feed-grains, began to rise, largely because ofthe unprecedented reduction in the l'.S.grain harvestthe product of govern-ment miscalculation and drought.

The food security index measures theadequacy of food supplies at the globallevel and thus -the broad potential forresponding to national shortages, but itsays nothing about-conditions within In-dividual countries. Here the best indica-tor, of course, is the nutritional state ofa country's population. At issue iswhether a growing child gets enoughfood to develop his or her full physicaland mental potential or whether aworker gets enough food to be fully pro-ductive. Per capita food availability for acountry indicates what the national average is, but not whether an individual isadeqttately nourished. Assessing nutri-tional adequacy requires some knowl-edge of how the national food supply isdistributed. But a lack of data on distri-bution makes it very difficult to estimatethe extent of malnutrition, thus leavingthe subject open to continuing debate.

The only time a decline in nutritiottshows up officially is when it is severeenough to affect mortality. When thishappens a country is facing famine, thentost obvious and severe manifestationof food insecurity. Using this criterion,inadequate though it is, developmentsover the past decade have nt.,1 been en-couraging. From the postwar recoveryyears until the early seventies, faminevirtually disappeared from the world.Except in China, which now admits to amassive famine in 1960-61. when it waslargely isolated, the world enjoyed a re-

markable respite from famine for a quar-ter of a century. Whenever famine didthreaten, the Uttited States intervenedwith food aid, even when it requirednearly one-fifth of the U.S. wheat croptwo years in a row. as it did followingmonsoon failures in India in 1964 and1965.21

By the early seventies, however. fooddeficits were widening and famine wasunfolding in several African countriesand in the Indian subcontinent. (SeeTable 10-8.) Several famines claimedhundreds of thousands of lives, provid-ing a grim reminder of the fragility offood security even in an age of advancedtechnology. Most were the product ofdrought and a failure of internationalfood relief mechanisms.

During the late seventies world re-serves were rebuilt and, except for strife-tc.rn Kampuchea, famines subsidedonly to return in 1983. a year of wide-spread climatic anomalies. The capacityof poor countries with falling per capitafood production and deteriorating soilsto withstand drought and floods haslessened. As a r _suit, more countriesthan ever before face the possibility offamine in early 1984. Among the threat-ened countries are Bolivia and Peru in

Table 10.8. Countries ExperiencingFamine Since 1950

Year LocationEstimated

Deaths

1960-61 China 8,9804001968-69 Nigeria (Biafra) 1,000.0001971-72 Bangladesh 450.0001972 India 830,0001973 Sahelian Countries 100.0001972-74 Ethiopia 200.0001974 Bangladesh 330.0001979 Kampuchea 450.0001985 Ethiopia 50,000

some; Worldwatch Institute estimates derivedfrom various official and t.r 3fficial sources.

204

.3n-wing Food Supplies (189)

Latin America. and over a !mire 01 «run-tries its Africa. An FAO team of agrono-mists assessing the food situation inAfrica in late 198:3 identified 22 coun-tries where crisis seemed imminentAngola. Benin. Botswana, Cape Verde,Central African Republic, C'nid, Ethi-opia, Gambia. Ghana, Guinea. Lesotho,Mali. Mauritania, Mozamhique. SaoTonic and Principe, Senegal. Somalia.Swaziland. Tanzania. Togo. Zamhia, andZimbabwe. The team of experts con-cluded that four million tons of emer-gency grain supplies would be needed toavoid starvation among the 145 millionpeople living in these countries.22

Since all governments gather mortal-ity data. though not equally well, it ispossible to document these severe foodshortages. But equally troubling is thenumber of people stifki arg fromchronic malnutritionthat vast middleground between those who arc wellnourished and those who are starving.Their numbers are difficult to measureand therefore easy to ignore. Indianeconomist Amartya Sen observes thathis government has been able to ignorethis endemic hunger because that hun-ger has neither led to a run on the mar-ket. and chaos, nor grown into an acutefamine with people dying of starvation.Persistent. orderly hunger does notupset the system." 23

A CRISIS OF MANYDIMENSIONS

There is no simple explanation of wh,Mints to eradicate hunger have lost mo-mentum or why food supplies for somesegments of humanity are less securethan they were. say. 15 years ago. De-clines in food security involve the con-tinuous interaction of environmental,

economic. demographic. and politicalvariables. Some analysts see the foodproblem almost exclusively as a popula-tion isst ..., noting that wherever popula-tion growth rates are low, food suppliesare generally adequate. Others view it asa problem of resourcessoil, water, andenergy. Many economists see it almostexclusively as a result of underinvest-ment, while agronomists see it more as afailure to bring forth new technologieson the needed scale. Still others see it asa distrihution problem. To some degreeit is all of these.

More countries than ever beforeface the possibility of famine inearly 1984.

In an important sense. the food probkm of the mid-eighties is the result ofresource depletion. The depletion of oilreserves. the loss of topsoil through erosion, and the growing competition forfresh water are central to understandingtrends in the world food economy. Asworld population expands, the shrinkingcropland area per person and the reduc-tion in average soil depth by erosioncombine to steadily reduce the percapita availability of topsoil for food pro-duction. If between 1980 and 2000 thereis a 6 percent net increase in cultivatedland area and a continuation of recentsoil erosion rates, the amount of topsoilper person will fall from 792 tons to 489tons by the end of the century. a declineof 38 percent. (See Table 10-9.) Becausethe energy that farmers substitute forsoil lost to erosion is becoming increasingl% costly. production costs every-where are on the rise.

In a basic arithmetical sense the foodproblem is a population problem. Ifworld population were now growing at 1percent instead of nearly 2 percent there

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(19o) State of the World-1984

Table 10.9. World Soil Resources and Excessive Soil Lou, 1980, With Projectionsto 2000'

Excessive RemainingYear Population Cropland Soil Loss Topsoil

TopsoilPer Person

(billion) (billion acres) (billion tons) (tons)

1980 4.42 3.12 22.6 3,500 7921985 3.17 23.1 3,385 7011990 5.28 3.22 23.5 3,270 6191995 5.73 3-27 23.9 3,150 8502000 6.20 3.32 24.2 3.030 489

lAssumes a net growth in world cropland area of 6 percent between 1980 and 2000. and an avengedepth of topsoil of 7 inches (or 1.120 tons per acre) in 1980.SOURCE: Woridwatch institute estimates.

would still be an ample margin for im-proving diets, as there was from 1950 to1973. As noted, however, the annualgrowth in food production has unfortu-nately fallen from the rather comfortable3 percent of that period to a rate thatbarely matches that of population.

Those who see the food problem pri-marily as a distribution problem arguethat if all the world's food were equitablydistributed among its people therewould be no hunger and malnutrition.This argument is technically sound but itrepresents a degree ofglobal abstractionthat is not very helpful in formulatingpolicies. It would mean, for example,that much of the world would be evenmore dependent on U.S. farmers thanthey are today, failing to realize that theonly long-term solution to hunger inmost Third World countries is more in-ternal production. And improving distri-bution is not just a matter of a bettertransport system or subsidized food dis-tribution programs. It requires dealingwith fundamental sources of politicalconflict such as land reform and witheconomic policies that encourage em-ployment.

Achieving a more satisfactory balancebetween the world demand and supplyof food requires ammtion to both sidesof the equation. On the demand side, thesuccess of efforts to upgrade diets may

206

depend on an emergency program toslow world population growth. Cur-rently farmers must produce enough ad-ditional food each year to feed an annualincrement of 79 million peoplepeoplewho must be provided for in years ofgood weather or bad.

Meaningful improvements in diet overthe rest of the century will depend, too,on gains in per capita income, particu-larly in the Third World. Unfortunatelythose gains are narrowing or disappear-ing. During the seventies, 18 countriesin Africa experienced a decline in percapita income. In most instances thesenational declines appear to be continu-ing in this decade. Unfortunately, the listof countries where incomes have fallenthus far during the eighties is far longerthan it was in the seventies.

Farmers must produce enough ad-ditional food each year to feed anannual increment of 79 millionpeople.

Also on the demand side is the ques-tion of how available food supplies aredistributed. The most vulnerable seg-ments of society in times of food scarcityare the rural landless in Third World

Securing Food Supphes (191)--

countries. Data collected on famine Table 10-10. United States: Concessionaldeaths in Bangladesh in 1975, for exam- Grain Exports Under Public Law 480,pie, show death rates among the landless 195542of 36 per thousand, three times that oftheir neighbors who owned three ormore acres of land.$ Reducing the sizeof this extremely vulnerable, rapidlygrowing landless popul: 'ion will requirefar more vigorous (mg) planning andland reform programs than most coun-tries have so far been able to mount.

On the supply side, the scarcity of newcropland, the continuing loss of topsoil,the scarcity of fresh water, the end ofcheap energy, and diminishing returnson chemical fertilizer combine to makeexpanding food production progres-sively more difficult. In addition, food-deficit Third World countries are nowstruggling with a heavy external debtload that is continuing to mount. For-eign exchange scarcities are reducingimports both of agricultural. inputs-andof food. In 1983, for example, Brazil,staggering under the world's heaviestdebt load, reduced its imports of fertili-zer and other key farm inputs. Scores ofother countries are similarly affected.25

At a time when concessional food aidis needed lore than ever, U.S. programsare at the lowest level of nearly a genera-tion. From their launch in 1954 throughthe late sixties, U.S. food programs ex-panded, reaching a high of 15.3 milliontons of grain in 1966, Enough to feed 90million people in its peak years, this aidwas an important defense against hun-ger in many countries. (See Table 10-10.) Preliminary estimates for 1983,however, indicate food aid shipmentshad dwindled to some 4 million tons ofgrain. Other assistance programs, suchas the World Food Programme, havebeen developed and expanded, but theyare small by comparison and cannotbegin to offset the U.S. decline. In amodest effort to enhance food securityin low-income countries, the Interna-tional Monetary Fund launched a new

Year Qpantity

(million tons)1955 5.4

1960 12.5

1965 15.0

1970 7.81971 7.31972 7.81973 5.51974 2.7

1975 3.71976 4.01977 7.21978 5.91979 5.9

1980 4.51981 4.11982 3.8

SOURCE: Detrain Rabe. U.S. Department of Agri.culture, private communication. August 1983.

facility in 1981 that would provide short-term supplementary financing to food-deficit Third World countries sufferingfrom temporary rises in food importbills.ts

In addition to the traditional prob-lems, political conflicts are creating aninstability in the Middle East, Africa, andLatin America that makes agriculturalprogress difficult. This new hindrance toprogress is reflected in the World FoodProgramme's emergency relief efforts.The share of emergency food reliefgoing to victims of human-caused disas-ters (refugees and displaced persons)has come to dominate the Programme inrecent years, after starting at a relativelymodest level. By 1982, less than one-third of the Programme's resources weredevoted to helping the groups who werethe principal recipients in the early

207

092) Slate of the World-1984

years, those affected by drought orcaught in sudden natural disasters, suchas floods or earthquakes. (See Table 10-1 1.)

Other disruptions borne of despera-tion are cropping up in food-deficitareas. In late 1983, reports from north-eastern Brazil described hordes of hun-gry rural people pouring into the townsdemanding food, water, and jobs. Afterthe town of Crato was invaded on threedifferent occasions, merchants beganvoluntarily distributing rations of beans,sugar, and flour to forestall sacking andlooting. Merchants in another town re-portedly lost some 60 tons of food tolooters."

Although drought and recession-induced unemployment are leading tohunger, the long-term forces convergingto create these conditions in the Brazil-ian northeast are essentially the same asthose that have led to the food crises in

Table 10.11. Allocation of World FoodProgramme Emergency Relief, 1963-82

Year Drought

SuddenNatural

Disaster'

Human-CausedDisaster'

(percent)

1963-72 44 33 23

1973 83 17 01974 54 36 10

1975 21 44 351976 30 18 521977 50 31 19

1978 25 41 341979 33 10 571980 33 5 621981 22 4 741982 20 11 69

'Includes earthquakes. floods. etc.'Includes refugees. displaced persons. and oth-

ers affected by cwil disturbances.some= World Food Programme. Annual Report ofthe Executive Armor on the Development of the Pro-gramme 1982 (Rome: 1983).

Kilograms300

200 -

100-

Source: U.S. Dept.of Aviaikure

1950 1960 1970 19180 1985

10.4. Grass Production Per Perms inAfrica, 195043

so many African countries: record popu-lation growth, underinvestment in api-culture, and physical deterioration in thecountryside. Ecologists have for yearswarned that mounting population pres-sures in northeastern Brazil leadins todeforestation and unsustainable agricul-tural practices would turn the area intoa desert. That grim scenario is now un-folding.

Trends in Africa since 1970 are a har-binger of things to come elsewhere inthe absence of some major changes inpopulation policies and economic priori-ties. After rising from 1950 to 1970, percapita grain production in Africa has de-clined rather steadily.2s (See Figure 10-4.) The forces that have led to this de-dine in Africa are also gaining strengthin the Andean countries of Latin Amer-ica, in Central America, and in the In-dian subcontinent. Whether the declin-ing food production now so painfullyevident in Africa can be avoided else-where will be determined in the next fewyears.

The issue is not whether the world canproduce more food. Indeed, it would bedifficult to put any foreseeable limits onthe amount the world's farmers can pro-duce. The question is at what price theywill be able to produce It and how thisrelates to the purchasing power of thepoorer segments of humanaty. The envi-

208

Securing Food Supplies (193)

ronmental, demographic, and economictrends of the seventies and early eightiesindicate that widespread improvementsin human nutrition will require majorcourse corrections. Nothing less than awholesale reexamination and reordering

of social and economic prioritiesgiv-ing agriculture and family planning theemphasis they deservewill get theworld back on an economic and demo-graphic path that will reduce hungerrather than increase it,

209

11

ReshapingEconomic Policies

Lester IL Brown

One need not be an economist to senscthat we are living in difficult economictimes. Economic growth over the lastfour years has been less than in any com-parable period since the thirties andthere have been no gains in per capitaincome for the world as a whole since1979. In countries such as Argentina,Brazil, Mexico, and Poland. massive ex-ternal debt is strangling economic prog-ress.

A projection of Brazil's economic fu-ture by Data Resources indicates that thecountry should be able to pay off itsdebt, but that doing so means its de-pressed industrial output will not regainits 1980 level until 1990. By this time $7million Brazilians u ill have been addedto the 1980 population of 119 million,greatly reducing output per capita.! Un-fortunately, this projected interactionbetween external debt, economic out-put, and population growth is not atypi-cal. It confronts dozens of developingcountries, large and small.

The budgetary deficits and externaldebts that confound policymakers today

derive from more-fundamental short-comingsoutdated population policies.inappropriate economic policies, andmisplaced priorities. In all-too-manycountries, population policies belong toanother age, a time when rapid popula-tion growth slowed but did not preventimprovements in living conditions. Eco-nomic policies. too, are a carry-overfrom a past when energy was cheap andresources were abundant. Existing pri-orities in the use of public resourceswere fashioned in an age when incomeswere everywhere on the rise, when moreguns did not preclude more butter.

The preceding chapters make clearthe extent of resource deterioration, adeterioration that now undermines eco-nomic performance in many countries.Policymakers often lose sight of the rela-tionship between the economic system,whose performance is monitored ingreat detail, and the resource base onwhich it depends. Glowing economic re-portswith key indicators such as out-put, productivity, and exports continu-ally setting new records in the short run

Reshaping Economic Policies

are possible even as the economicpolicies that generate them are destroy-ing the resource base. Indeed, one rea-son for the bullish indicators might bethe consumption of the resource baseitself, as the discussion of "Living Be-yond Our Means" in Chapter 1 indi-cates.

The need for a oew accounting systemi I; now evident. Existing economic in-dicators need to be supplemented byothers that distinguish between self-defeating and sustainable growth. Mostfundamentally. the world needs a systemof economic accounting that reflectsmore completely the effects of economicpolicies on the resource base and, con-versely, the effect of changes in the re.source base on the economy. This sys-tem must account for more than theshort-run "bottom line"; it must incor-porate values that maintain economiclife.

A REVISED ACCOUNTINGSYSTEM

The lack of a more complete economicaccounting system has led many govern-ments to adopt ill-conceived policies inthe management and use of resources. Ithas permitted governments to focus onproduction, while largely ignoring theeffects on the natural capital that makesproduction possible. In some instancesthe accounting gap has led to a more orless permanent loss of productive capac-ity. As this report documents, govern-ments' shortsighted approach can beseen in one case after another: topsoil,water supplies, grasslands, forests.

Few annual accountings of soil forma-tion and soil loss have been attempted,so national political leaders often do notknow whether soils are being farmed or

(195)

mined. Lacking data on soil erosion,governments cannot compute either theon-farm cost of soil loss or the off -farmcosts of, for example, hydroelectric res-ervoir sedimentation. This in turn pre-cludes complete cost/benefit analyses ofsoil conservation programs.

Glowing economic reports are pos-sible even as the economic policiesthat generate them are destroyingthe resource base.

Resource accounting could help man-age other resources intelligently as well,Water demands often exceed renewablesupplies, leading to falling water tables,dwindling river flows, and shrinkinglakes. Grasslands are being convened todesert in many areas of the world, butthere is no effort to relate desertificationto excessive livestock numbers and theloss of grazing capacity through over-grazing. And little accurate annual dataon changes in forested areas exist, so inmany situations trees are being felledfaster than they are regenerating. Manycountries simply do not know when theybegin consuming the resource base it-self. By the time it becomes physicallyobvious that they ars aping so, it can betoo late to act.

Changes in a few resource stocks arecarefully monitored at the global level.For example, governments annually re-cord the amount of oil produced andnewly discovered, making it easy to de-termine changes in reserves. This infor-mation helps policy makers decide howrapidly the remaining oil reserves shouldbe exploited. When aggregated at theglobal level, the sum of these nationaldata provides information of great valueto decision-makers everywhere, from in-dividual consumers to political leaders.

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(t96) State of the World-1984

At the national level, only Norway ap-pears to have adopted a comprehensiveresource accounting system. In 1974 theNorwegian Stortinget (Parliament) in-structed the Ministry of Envii onment toprepare an annual review of natural re-source stocks, their annual consump-tion, and any proposals for their futureuse. Work on the methodology for thisassessment began in 1975 and a prelimi-nary study was presented to the Stortin-get in 1977. It included an accountingboth of material resources and of basicbiological life - support systems. Othercountries, including Canada, France,Japan, and the Netherlands, have experi-mented with alternative accounting sys-tems but none has progressed as far asNorway in developing a comprehensiveaccounting.2

Norway's goal in resource accountingis to maximize the "social profit" of re-sources and to prevent depletion or deg-radation wherever possible. In a UnitedNations Environment Programme re-view of the status of environmental ac-counting, Edward Weiner observes that"the concept of 'natural capital' is at theheart of the Norwegian resource ac-counting system."3 Its early achitects de-cided. probably wisely, not to attempt tointegrate it with 1:te national economicaccounts, In part this was because thelatter are kept in monetary units, whereasresources are measured in physical units.

The Norwegian experience illustratesthe value of a modest but realistic ap-proach to accounting. It also demon-strat es that each country needs to designits own system. one that is suited to itsparticular circumstances and needs.Japan, for example, a heavily industrial-ized and densely populated country, hasfocused on the costs of mitigating envi-ronmental damage, M particular theeffects of air and water pollution onhuman health. South Korea, in a some-what similar situation, has patterned itsapproach after that of Japan!

In the Third World the primary needis to identify and measure the resource.degrading consequences of economicactivity. Governments in these coun-tries, where "natural capital" is so over-whelmingly important, need to knowwhat is happening to soils, forests, grass-lands, and water resources. If a desert isexpanding. for example, policymakers inthe area want to know how fast it isspreading and what can be done to re.verse the process.

Occasionally a country will institute adetailed accounting system when a re-source is of particular value or when itsstock is known to be diminishing. whichwould have potentially serious long-term economic consequences. It wasprecisely these concerns t'slt led theU.S. Congress to pass the ResourceConservation Act in 1977, which re-quired the Department of Agriculture toconduct a national soils inventory, focus-ing particularly on the relationship be-tween soil erosion and new soil forma-tion. The first assessment, in 1977, drewupon some 200,000 samples from crop-lands across the country and providedthe most detailed information ever onU.S. soils. The survey was repeatedagain in 1982, but with even greater de-tail. Relying on close to a million individ-ual samples, it represented the most ex-haustive inventory of soils everundertaken by any country. The comple-tion of the 1982 assessment providedU.S, soil scientists with two data pointsthat can be compared to establish long-term trends .3

A resource accounting system pro-vides a means of incorporating the costsof "externalities" such as acid rain orsoil erosion into decision - making. Thegoal is more intelligent policymakingand a more enlightened public and pri-vate management of resources. Muchmore than a resource accounting systemis needed, of course. for intelligent envi-ronmental and resource management,

212

Reshaping Economic Policies

but this is a necessary yardstick for mea-suring a system's effectiveness.

NEW ECONOMIC INDICATORS

As the emphasis in economic policymak-ing and planning shifts toward sustaina-bility, the inadequacy of many widelyused economic indicators becomes obvi-ous. As the goal of economic policy isredefined, new indicators are needed tomeasure progress. Central to this newdefinition is Kenneth Boulding's obser-vation that "it is stocks of goods thatcontribute to human well-being whileflows contribute to gross national prod-uct."6 Under the existing national ac-counting system. the production ofshoddy goods that have to be replaced

.._ __or repaired frequently _raises the GNP.whereas a modest additional investmentin high-quality engineering that greatlyex:ends the lifetime of products lowersthe GNP.

A set of economic indicators designedto measure progress toward a sustain-able society should include data, for ex-ample, on the recycling of major re-sources such as steel, aluminum, glass,and paper. The throwaway societyevolved when energy was cheap, rawmaterials were abundant, and there werefar fewer people competing for re-sources than there are today. Societiesfailing to realize that these days are overare likely to pay with a falling standard ofliving. The release of monthly data onmaterials recycling would help highlightthe importance of this process for boththe general public and key decision-mak-ers. Such indicators are not particularlydifficult to develop; recycled scrap steel,for instance, is processed through millsjust as iron ore is and thus can readily bemeasured.

Changes in the relative values of the

('97)

various factors of production also callfor new economic indicators. From thebeginning of this century until 1973, en-ergy became progressively cheaperwhile labor became more expensive.That trend has since been reversed, wit:.energy costs rising much more rapidlythan those of labor. With extensive andgrowing unemployment in industrial aswell as developing countries, these newrelationships suggest a need to focusmore on energy productivity, specificallyon that of oil, the scarcest fossil fuel. Thebarrels of oil needed to produce $1,000worth of GNP, a measure discussed inChapter 3, is a useful way of determininghow well a society is doing in weaningitself from this versatile but dwindlingenergy source. Similarly, since croplandarea is essentially fixed, the value of landis increasing relative to that of labor,making land productivity relatively moreirnportant,This is to imply that laborproductivity is unimportant; rather itrecognizes that raising the productivityof energy and of land increasingly holdsthe key to raising labor productivity.

In a world where the rate of popula-tion growth is often the principal deter-minant of efforts to improve living con-ditions. data on , population growthbecome an important measure of prog-ress:. The need here is not for a new indi-cator but for the more systematic gather-ing and dissemination of data on birthrates. Reporting this data monthly, justas governments already do for employ-ment and inflation, would remind peo-ple how much remains to be done inorder to achieve population stability.

As pressures on the global resourcebase intensify, spurring the shift to de-velopment strategies focused on basicneeds, indicators other than income mayprove more useful in measuring livingstandards. Given the basic need forfood. particularly in low-income coun-tries, per capita grain consumption orcaloric intake may be more telling men-

213

(198) State of the World-1984

sures of well-being. Indeed, Bangladeshhas begun to define poverty not in termsof per capita income but in terms of ca-loric intake. In 1980 the government re-ported that 85 percent of the peoplewere living below the poverty line.defined as 2,122 calories a day. and 54percent below the extreme poverty levelof 1,885 calories.?

A new set of economic indicatorskeyed directly to basic social needscould help guide the effort to createa sustainable society.

In a world where resource scarcitiesmake rapid economic growth more diffi-cult or less desirable. designing develop-ment strategies that focus more sped&cally on basic social indicators such aslife expectancy or infant mortality maybe useful. The Overseas DevelopmentCouncil has devised a Physical Quality ofLife Index WQLD based on three socialindicatorslife expectancy, infant mor-tality, and literacyas an alternative toper capita income. The profiles devel-oped with this new index suggest thatrather high levels of social well-beingcan be attained at rather modest levels ofresource consumption, providing an ap-propriate development strategy is fol-lowed.8

Progress towards a sustainable societyrequires changes that will reduce thevalue of GNP as an indicatorunder-scoring the need for new economic in-dicators. For example, if the construc-tion industry begins to incorporate thebasic principles of climate-sensitive ar-chitecture, new buildings will require farless energy than existing structures. Ineffect, architectural design and engi-neering know-how will be substituted forenergy, leading to much lower energy

214

use and a decline in gross national prod-uct, but also to an improvement in thestandard of living.

Similarly, as planned obsolescence isabandoned in favor of high-qualitygoods emphasizing durability, this toocould lead to a decline in apparent eco-nomic output. Stated otherwise, many ofthe practices that have led to such enor-mous increases in gross national productdo not necessarily cot Mate with im-provements in quality of life. In movingtoward a sustainable society it is quitepossible to have a short-term decline inGNP while living conditions are improv-ing. A new set of economic indicatorskeyed directly to basic social needs couldhelp guide the effort to create a sustain-able society.

ECONOMIC POLICIES FORFULL EMPLOYMENT

Economic analysts now put rising unem-ployment and international indebted-ness at the top of the list of the worldeconomic problems, both having at leasttemporarily superseded inflation as anissue of concern. Unemployment andunderemployment have been growingsteadily for more than a decade in theThird World as more and more youngpeople reach working age. In some de-veloping countries the unemployed andunderemployed combined may consti-tute a third or more of the total laborforce.

Even Western industrial societies areplagued with rising unemployment. Inthe United States, the United Kingdom,and several countries in WesternEurope, unemployment reached double-digit levels in the early eighties. Aratchet effect can now be seen in thegrowth of unemployment in these sod-

,

Reshaping Economic Nimes (199)

rites. During recessions unemploymentincreases, while during economic recov-ery the number of unemployed stabilizesor declines only modestly, leaving thetotal number of job-seekers littlechanged. Thus with each economic cycleunemployment moves higher.

Theoretically the factors of produc-tionland, labor, and capital, which in-cludes energyshould combine in themarketplace in optimum combinations.If a given factor is not fully used, its priceshould drop. But market rigidities suchas minimum wages and fixed salaries formany categories of workers have over-priced labor relative to other productivefactors, leaving many people withoutjobs. The result is a waste of labor anda less-than-optimum combination of thebasic factors of production.

Neither national governments nor in-ternational development agencies haveproved very proficient in devising eco-nomic policies that will take full advan-tage of a country's labor force. No gov-ernment would consciously idle part ofits energy flow or cavital assets. Puttingmoney in a mattress would be unthink-able because it would not contribute toproductive capacity or earn interest. Andyet labor is used as unproductively asmoney in a mattress as a result of poorlyconceived economic policies. Govern-ments can avoid this by systematicallyseeking opportunities to use unem-ployed labor to increase a country's en-ergy output, to conserve energy, or toincrease food production.

One of the more imaginative efforts ofthis kind is South Korea's reforestationcampaign, which is described in somedetail in Chapter 5. In the early seventiesthe government launched a nationaleffort to replant the denuded hillsides ofthe country, land that as otherwise use-less. By the end of the decade, seasonallyunemployed villagers had planted anarea in forest that was two-thirds as largeas that in rice. This "greening of the

countryside" was achieved by combiningfast-growing pine seedlings from gov-ernment-run nurseries, the organiza-tional capacity represented by village-level cooperatives, and seasonallyunemployed labor.

In effect South Korea has created amajor energy resource, one that will pro-vide fuelwood in perpetuity with a mini-mal expenditure of funds. Reforestationin this setting amounts to ecologicrehabilitation. By reducing runoff, for-ested lands reduce soil erosion and helprecharge underground aquifers. SouthKorea's efforts, which have added to thecountry's resource stock and reduced itsunemployment, are a model for othercountries. Maintaining, culling, and har-vesting the planted trees will provideemployment to thousands of villagersfor the indefinite future.

Another activity particularly impor-tant in rural areas is the construction ofsmall dams that can be used for electricalgeneration and for water storage and ir-rigation. Small dams, which can be builtalmost exclusively with hand tools, canalso reduce runoff and potential damagefrom flooding. China, which has some89,000 small, locally constructed damswith a combined electrical generatingcapacity of nearly $,000 megawatts, isthe unquestioned leader in this re-sourceful use of labor.9

A closely related effort that can capi-talize on rural seasonal employment isthe construction of terraces on hillsidecropland. As noted in Chapter 4, wherepopulation growth is rapid, farmers havemoved up the hillsides so fast that timehas not permitted construction of theterraces needed to stabilize and preserveagriculture on these sloping lands.Mobilizing seasonally unemployedworkers for this task could ensure boththat soil on this land is retained and thatrainfall is captured and used to goodeffect.

In a world where water is becoming

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(200) Slate of the World -1984

increasingly scarce and a constraint onfood production, reducing water lossfrom canals can yield a robust return.Even in advanced industrial societiessuch as the United States or the SovietUnion, irrigation canals are often dug inthe bare earth without the benefit of anylining. Using stone, brick, or even a layerof plastic can sometimes virtually elimi-nate seepage, which can siphon off up to40 percent of irrigation water supplies.In addition to reducing waterlogging.often a problem in irrigated areas withcanal seepage, the investment of unem-ployed labor in this water conservationeffort would also expand the irrigatedarea.' °

One of the most promising areasfor employment expansion ismaterials recycling.

The broad-based effort to develop re-newable energy substitutes provides anabundance of job opportunities. Theshift from gasoline to alcohol as an auto-motive fuel in Brazil illustrates this po-tential. The increase in cropped acreageneeded to produce sugarcane for thedistilleries is a source of direct employ-ment in agriculture. At the same time theconstruction of alcohol distilleries in thecountryside near the cane fields providesa form of industrial employment in thecountryside. Although petroleum refin-eries need only a handful of workers, al-cohol distilleries employ many."

A similar advantage exists in the de-velopment of wind power, an energy re-source that is widely available comparedwith coal or uranium. Turning to thewind rather than nuclear power in theThird World also creates manufacturingjobs locally since virtually all developingcountries have the industrial capacity toproduce wind-electric generators, while

they would have to import reactors.Another energy source that can be ex-

ploited largely by indigenous labor isbiomass, which can be converted intomethane by using locally built methanegenerators. Every village in the ThirdWorld has a certain amount of organicmaterialhuman and animal wastes,household wastes, and crop residuesthat can be converted into methane byan anaerobic digester. These methanegenerators extract the methane from or-ganic material while leaving a nutrient-rich sludge that can be used as fertilizer.In effect, methane generators combinethe production of energy and the recy-cling of nutrients, which is certain to be-come an appealing combination as ferti-lizer prices continue to rise.'s

As electricity rates and oil and naturalgas prices rise, a prime opportunity ex-ists to substitute solar collectors forthese conventional sources. A concertedworldwide effort to shift to this methodof water heating, a move that makesmore and more economic sense, wouldcreate millions of jobs in the fabrication,marketing, distribution, and installationof solar panels.

The manufacture and marketing ofmore-efficient stoves for cooking in theThird World is another industry ripe fordevelopment. Food cooked on an openfire uses several times as much firewood,cow dung, or crop residue as that cookedon more-efficiently designed closedstoves. One advantage of several newvarieties of stoves is that they can bemade entirely from local materigs andproduced by village-level industries.The social contribution, of the reducedpressures on forests and of additionalemployment would be substantial's

Within the United States, one of themost promising areas for employmentexpansion is materials recycling, whichhas the advantage of reducing energy re-quirements, consumer costs, pollution,and materials use. The use of. irgin ores

216- =

Reshaping Etonomit Polities (201)

for the production of throwaway con-tainers and other materials is capital-and energy-intensive but uses relativelylittle labor. Recycling, by contrast, is alahor-intensive activity that requires farless capital and energy.

One sector in which all societies canincrease employment while reducing en-ergy use is transportation. One of theattractions of the 55-mile-an-hour speedlimit in the United States, in addition tothe energy and lives it saves, is that itincreases employment in both freightand passenger transportation. Anothervariation on this basic theme of exchang-ing energy for employment lies in thedesign of public passenger transport sys-tems. In some developing countries,such as Indonesia. the Philippines, andTurkey. small vans that carry six to tenpassengers are driven on establishedtransportation routes, providing passen-ger transport that is easily competitivewith buses in terms of cost but that usesless energy and more drivers."

hi some cases a combination of theinitiatives cited above multiplies job op-portunities. For example, the construc-tion of a local water storage pond or res-ervoir in a rural community can permitdouble cropping. In many Third Worldcountries an increase in water suppliesduring the dry season will make year-round cropping possible. In the Philip-pines, for example, a new rice-produc-tion system has developed in areas withcontinuous water supplies. A farmerwith, say, four acres of land divides itinto small plots that are in rice continu-ously except during the few days be-tween harvest and replanting. Each weekanother plot is harvested and replanted.With such intensive rotation, the workload is distributed evenly throughout theyear. Labor is used with maximum effi-ciency and the land yields three or fourcrops of rice annually.ls

Mounting unemployment is not inevi-table in either industrial or developing

countries provided national leaders un-derstand what needs to be done andhave the political will to carry it out. Inmost situations the limiting factor isimagination and the capacity to orgahizepeople at the local level to achieve com-mon social goals, whether the objectiveis planting and maintaining a village fire-wood plantation or building a small damto store water and generate electricity.

EQUITY AND STABILITY

As long as the world economy was ex-panding at 4-5 percent per year thequestion of how equitably wealth wasdistributed was largely defused. It wasassumed that the rising economic tidewould raise living standards everywhere,and in most countries it did. But nowthat economic growth has slowed itbecomes more difficult to dodge the dis-tribution issue.

As economic growth lost momentumduring the early eighties it fell behindpopulation growth in many countries.For hundreds of millions of people in-come levels in 1983 were less than in1980, For this segment of global societythe exhortations to be patient, that theirlot would improve, are becoming less ac-ceptable, As world population movedfrom 3 billion in 1960 to 4.6 billion in1983 it outstripped the growth in manybasic commodities on which humanitydepends. When the per capita supply ofa commodity is stagnant or falling forthe world as a whole, if some people con-sume more, then others must consumeless. Patterns of income distributionwithin and among societies must be con-sidered against this shifting global eco-nomic and resource backdrop.

One common measure of the equity ofincome distribution within a society isthe ratio of the income received by the

217

(202) State of the World-1981

wealthiest one-fifth of popuiltion to thatof the poorest one-fifth. This provides ameans for comparing income distribu-tion regardless of the level of develop-ment. In the more socially progressivecountries, such as those in WesternEurope, the income ratio of the top one-fifth to the bottom one-fifth ranges from4 to 1 to 6 to 1. (See Table 11.1.) Twoother major industrial societies, Japanand Australia, are also within this in-

Table 11.1. IncomeDistribution, Selected Countries'

Relationshipof Income

of Top One.Fifthto Bottom One-FifthCountry

FinlandDenmarkJapanNetherlandsSwedenUnited Kingdon

BangladeshWest GermanyNorwaySri LankaYugoslaviaIndia

IndonesiaSpainSouth KoreaTanzaniaFranceUnited States

MalaysiaTurkeyVenezuelaMexicoPeruBrazil

(ratio)

4/15/15/15/15/15/1

6/16/16/16/16/17/1

7/17/18/18/i9/1

10/1

16/116/118 /I20/1S2/1SS/1

'Data are for latest year availablesovitce: World Bank. World Development Report1981 (New York: Oxford University Press, 1989).

come distribution bracket. Within theThird World, India, Bangladesh, and iriLanka stand out, with income distrif-u-don ratios of 6 or 7. Other major indus-trial countries with somewhat less equi-table income distribution patternsinclude France (9 to 1), the united States(10 to 1), and Canada (11 Ito 1).

At the other end of the spectrum arecountries in Latin America -Ind the Mid-dle East. Brazil, which has by far thegreatest concentration of wealth of anymajor country, is at the bottom of thescale, with a ratio of 33 to 1. This ex-plains why Brazil is sometimes describedas "a Belgium and an India" within thesame boundaries. For the upper 10 per-cent, or roughly 13 million people, in-comes are comparable to those in north-western Europe: for many remainingBrazilians, incomes and living condi-tions are much closer to those in India.Mexico, the second largest country inLatin America, also has a highly skewedincome distribution pattern. The weal-thiest one-fifth of its population has anincome 20 times as great as the poorestone-fifth. In Mexico. as in Brazil, thisputs the poorest segments of society at ameager subsistence level of existence.

For governments wishing to adtieve amore equitable distribution of incomethere are numerous public policy instru-ments that can be used. One of the mostcommon, of course, is a progressive in-come tax, a principle of taxation that hasbeen widely adopted throughout theworld. Education, or more precisely ac-cess to education, can also play an essen-tial role. To be an effective equalizer, theeducational system must be accessible toall people regardless of their economicor social standing.

When policies to redistribute incomedo not adequately reduce inequalities,governments can turn to the redistribu-tion of productive assets, relying on landredistribution or employee stock optionplans. In largely agrarian societies, land

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Reshaping Economic Palm (203)

redistribution is often the key to redis-tri hut ing wealth. Prominent amongthose using this device are Japan. SouthKorea. and Taiwan. countries that im-plemented thorough land reform pro-grams as part of the reconstruction fol-lowing World War II. Other countries.such as the United States, have broughtabout land redistribution indirectlythrough ittitiatives ouch as the Home-stead Act. Although land reform is oftenthe key to both wealth redistribution andsuccessful rural development. it is also apolitically formidable undertaking.

It is a mistake to invest heavily in anextensive automobile infrastruc-ture that will hew& only a smallfraction of a country's population.

The selection of technologies oftenhas an indirect impact on the distribu-tion of wealth. For example. when Pakis-tan was granted a large loan by theWorld Bank to purchase four-wheel trac-tors of the sort used in Europe and theUnited States, the larger farmers, whowere able to afford this equipment, ac-quired an advantage. With this tillage ca-pability many began looking for addi-tional land tu add to their holdings,often absorbing smaller farms, whoseowners lacked mechanical power. Thenet effect was a further concentration ofland in the hands of wealthier landown-ers. A more equitable alternative wouldhave been to use the resout.:es to importor domestically manufacture smallertwo-wheel power tillers of the Japanesevariety. an approach that would havehelped smaller farmers remain competi-tive. 16

A similar situation exists with trans-portation planning. Given that there isnot enough oil or other fuel to permit

antomobile fleets in the Third World toachieve the near-saturation levels of theUnited States or Western Europe. it is amistake to invest beavily in an extensiveautomobile infrastructure that will be-nefit only a small fraction of a country'spopulation. Social equity is better servedby investing these same resources in anextensive public transportation systemaugmented by bicycles, mopeds, andmotor scooters. ,Motorized three-wheelrickshas of the sort pioneered in Indiacould be used as taxis.

Similarly. the selection of medicaltechnologies influences the distributionof health care services. If a country in-vests in a large modern hospital in itscapital city it will be able to serve a smallelite rather well but will lack the re-sources to provide any medical servicesat all to the bulk of the population. In thePhilippines, for example, a $50-millionheart-surgery center has been con-structed at a time when many Filipinoslack access to even rudimentary healthcare. The waste is even greater becausethose Filipinos who can afford open-heart surgery prefer to fly to the UnitedStates for the operation rather than en-trust themselves to local surgeons.17 In-vesting $50 million in village clinks andthe training of paramedics could mea-surably reduce infart mortality and raiselife expectancy in the Philippines.

In many Third World countries thereis a particularly strong bias against ruralareas that must be addressed. Urbanareas invariably manage to command thelion's share of investment in public ser-vices. Development economist MichaelLipton points out that in India, for ex-ample, a youngster born in an urban set-ting is eight times more likely to gainaumission to college than one born in avillage.ze Similar contrasts can be foundthroughout the world in investment inbasic social services such as educationand health care.

As it becomes clearer that the world

219

(204) Slate of the World-1984

economy is not likely to resume therapid growth of the last few decades, theemphasis in economic policymaking anddevelopment planning needs to shift to-ward efforts to satisfy basic needs if liv-ing conditions are to improve. The"basic needs" development strategyconcentrates on nutrition, literacy, andhealth care. Social planners will need toacknowledge that for a person with a ioafof bread an additional crust is of littlevalue, but for someone who has only asingle crust of bread. a second crust cangreatly improve the quality of life.

Countries with severely skewed in-come distribution patterns often lack so-cial cohesiveness, making it difficult tomobilize for the achievement of specificgoals. South Africa is facing this di-lemma as it confronts a threatening pop-ulation explosion. When commentingon a recent governmental commissionreport on projected population growthin South Africa, Professor David Welshof the University ofCapetown observed:"Reading the somber unemotive factspiled up by the science committee. oneis made aware that we have a time bombticking away in our midst. If future popu-lations are to control population growththe old order of racial supremacy anddiscrimination, of forced migrancy andpoverty. of inadequate housing, andunequal education will all have to go."Without these social adjustments. the re-port concluded. it would be virtually im-possible to bring fertility down fastenough to avoid a Malthusian catastro-phe. is

Given the grossly inequitable incomedistribution patterns in many ThirdWorld countries, the potential for socialunrest and political unstability is high.This is painfully evident in Africa, whereincomes are now falling in so manycountries, and in Latin American coun-tries with large external debts, where se-vere belt tightening measures are re-quired to maintain credit-worthiness. At

22

issue. as Fortner U.S Assistant Secretaryof State C. William Maynes observes, iswheal( r "the eciaomic strains thatThird World goveniments are ex-periencing ar" proving too great for ex-isting political structures to sustain." s0In a world experiencing economicstresses 1..ore sevete titan any since thethirties, political stability may depend onreducing inco..i disparity to a rangethat is morally acceptable and politicallytenable.

Now GUNS OR BUTTER

The past generation has witnessed anunprecedented militarization of theworld economy. Prior to World War II,military expenditures claimed less than Ipercent of gross world output. In 1963they consumed 6 percent. In real terms,military expenditures increased sometwentyfold between the early thirties andearly eighties.

The militarization of the world econ-omy. initially spurred by U.S.-Soviet ri-valry, has spread to the developingworld as well. Increasingly, countries areseeking security in military power. In1983. this translated into global militaryexpenditures of $663 billion, a sum thatexceeds the combined income of thepoorest half of mankind. (See Table 11-2.) This trend threatens society in twoways. As militarization and moderniza-tion have proceeded apace over the pastgeneration. new weapons have evolvedthat possess an unprecedented destruc-tive capacity. Much of this destructivepotential is vested in some 50,000 nu-clear weapons, 98 percent of them in thehinds of the two superpowers.21

The second threat to society frommilitarization is less direct. stemmingfrom the diversion of resources awayfrom pressing social needs. Swedish Un-

Reshaping Economic Policies (205)

Table 11-2. World Military Expenditures,1973-83 (in 1980 dollars)

Year ExpendituresAnnualIncrease

(billion dollars) (percent)

1973 474 111.

1974 488 3.01975 503 3.01976 509 1.21977 519 2.01978 532 2.51979 554 4.11980 561 1.21981 579 3.21982 619 6.919831 663 7.1

'Preliminary estimate by Worldwatch Institute.soustcz: Stockholm international Peace ResearchInstitute. World kmaatetris and Asmara*. SIPRIYearbook 1983 (New York: Taylor & Franck. Inc..1983).

der-Secretary of State Inga Thorsson,who chaired a U.N. group studying therelationship between disarmament anddevelopment, reports that the study"presents overwhelming evidence thatcontemporary military establishmentssignificantly distort and undermine thevery basis of sustained economic and social development in all countries."22Every dollar spent for military purposesreduces the public resources availablefor other purposes. Tice implications ofthis are most evident at the nationallevel. Although the United States leadsthe world in military expenditures themilitary share of the Soviet economy issubstantially larger, an estimated 9-10percent compared with 6 percent for theUnited States. This drain of resourcesfrom agriculture and the consumer-goods sector of the Soviet economy isleading to a markedly slower rate ofprogress than was achieved as recentlyas a decade ago.2s

Conditions within the Soviet Unionsuggest tl. ' its leaders will respond to a

U.S. initiative that would lessen interna-tional tensions and permit the Soviets tofocus on their internal economic prob-lems. In his missile-freeze speech inearly 1982, President Brezhnev said,"We have not spent. nor v;i11 we spend asingle ruble more for these purposesthan is absolutely necessary." As Sovietanalyst Marshall Goldman notes, this de-parts from past statements since Sovietleaders normally omit cost considera-tions when discussing military matters,and it may well reflect a Soviet interest inreordering priorities.24

Although Brezhnev's successor, YuriAndropov, has not publicly addressedthis point, the Soviet economy is clearlysuffering from the heavy diversion of in-vestment capital to the military sector.One consequence of the heavy Sovietemphasis on military production is thatthe Soviet Union is militarily strong andagriculturally weak. Now the world'slargest food importer, it depends heavilyon grain imports from the United States,the very country its military buildup isaimed at.26

For the United States, the diversion ofinvestment capital to the armsproduc-ing sector is depriving the remainder ofthe economy of investment capital. Oneconsequence is that old plant and equip-ment is not being replaced, leading to adecline in the U.S. competitive positionin the world economy. The competitiveadvantage in basic industries such assteel and automobiles is shifting towardcountries with more modern, more ener-gy-efficient plants and equipment. Econ-omist Robert Lekachman observes that"the huge deficit engendered by impru-dent tax cuts and even more misguidedenlargement of the Pentagon rakeofffroth the economy have turned the Treasury into a potential competitor for rela-tively scarce investment resources andcontributed heavily to the skittishness ofthe financial markets."26

At the global level, research expendi

221

(206) State of the World-1984

tures devoted to the development of newweapon systems overshadow the strictlymilitary share of the world economy. Anestimated 23 percent of all investmentin science attd technology is designed toeither improve existing weapon sys-tems or develop new ones. (See Table11-3.)

Some 500,000 of the world's finestscientists and engineers work in militaryresearch.27 Given the skill levels re-quired in developing new weapon sys-tems, it is likely that the share of toptalent engaged in this destructive field ofendeavor is well above the 22 percent ofscientists involved overall. Not only domilitary expenditure dominate the glob-al research and development budget,but they far exceed the combined re-search funds to develop renewable en-ergy technologies, expand food output,and improve contraceptives.

Costly though these diversions offinancial and scientific resources are,they may be matched by the claims thatmilitarization makes on the time ofpolitical leaders. More and more of theworking day of these individuals ap-pears to be absorbed in attempts to re-solve hue' national conflict in one partof the world or another. Not only doesconflict divert the energies of politicalleaders from other tasks, but the con-frontational climate that exists, particu-larly between the two superpowers, is

not conducive to the cooperative ad-dress of problems.

The progressive militarization of theworld economy h also beginning toaffect the stability and integrity of theinternational economic system. Weap-ons purchases have contributed to theburdensome debt with which manyThird World countries are now saddled.Within the United States, growth in mili-tary expenditures during the early eight-ies has contributed heavily to the recordfiscal deficits. It is certain to keep inter-est rates high in world financial marketsfor years to come, pushing debt-bur-dened 'Third World countries toward.'fault. As of the mid-eighties the greatestsingle threat to world financial securitymay be the enormous U.S. fiscal deficit,part of it incurred in the name of na-tional security.

The economic backdrop to militariza-tion is changing. During the third quar-ter of this century, the world was able tohave both more guns and more butter.Since 1978, however, world military ex-penditures have expanded at more than4 percent per year in real terms, com-pared with 1.7 percent for the worldeconomy.2e With per capita income forthe world as a whole stagnating since1979, increasing the military share of thegross world product has been possibleonly by reducing civilian consumption.It is this fundamental change in the eco-

Table 11-3. Estimated Diversion of World Resources to Military Use, 1980

Resource Diversion to Military Use

Military expenditure

Labor forceLandExpenditure on military science and

technologyscientists and research workers engaged

in military research

5561 billion6 percent of gross world product50 million workers1 percent of earth's land surface23 percent of total expenditure on science

and technology22 percent of wodd total

some: Worldwatch institute estimates based on data in Inga Thorsson, '"Guns and butter: Can theworld he both?." hurrnaholutt Labour &vim July/August 1983.

no^44, 4

Reshaping Economic Policies (207)

nomic backdrop against which resourcesare allocated between military and non-military sectors that may force politicalleaders back to the drawing board in al-locating priorities.

That military expenditures could ex-pand when the economy is stagnating isan indication that the roots of militariza-tion are deep in the body politic. RuthLeger Sivard, compiler of the annualWorld Military and Social Expenditures.notes that "even long established de-mocracies, where civilian control of themilitary is a firm tradition, are not im-mune to the effects of the military powerthey have created in the name of de-fense."" Within national governments,departments or ministries of defetrctypically dominate the budgetary pi fl-cess.

Sivard notes that the arms-producingindustry is "one of the most prosperousand powerful industries in the worldtoday with unparalleled resources to in-fluence political decisions. As salesagent for a burgeoning governmentsponsored trade in arms. it takes on im-portant policy making functions whichdetermine priorities both at home and inforeign countries."se Countering themilitary-industrial complex that Presi-dent Eisenhower warned about as he wasleaving office will not be easy. Only whenpeople become aroused in large num-bers is the militarization of the worldeconomy likely to be reversed. Risingpublic awareness of where current worldmilitary expenditures and policies couldlead has translated into some of the larg-est political demonstrations and massrallies ever held in Western Europe orthe United States. New organizations arespringing up on both sides of the Atlan-tic to counter what is perceived to be adangerous drift of events.

Another possible hope for reversingthe trend toward militarization lies withthe International Monetary Fund (IMF)and the World Bank. The IMF in panicu-

lar is gaining leverage in many ThirdWorld countries as they are forced toturn to it for investment capital. If theireconomic viability and capacity to ser-vice debt hinges on reducing military ex-penditures and foreign exchange outlaysfor arms imports, the IMF may be able toturn national policies in a more rationaldirection.

Weapons purchases have con-tributed to the burdensome debtwith which many Third Worldcountries are now saddled.

Yet another possibility is the emer-gence of a strong national politicalleader or international figure who hasthe stature to turn the world away frommilitarization. An example of this pro-cess on a smaller scale is the way coun-tries in Western Europe have success-fully ended generations of enmity andconflict. In part this is due to postwarvisionaries such as Jean Monnet who sawa European community as a solution.s1Exactly how the current worldwide con-flict between the military goals of gov-ernments and people's aspirations for abetter life will be resolved remains to beseen. But it seems clear that if militariza-tion of the world economy continues.the social costs will be high.

One glimmer of hope in this field re-sides in Argentina. where the newlyelected government, the first nonmili-tary government in almost eight years, isplanning to reduce military expendi-tures sharply Shortly after his electionon October 30, 1983, President-electRaul Alfonsin announced plans to boostspending on education and welfare bycutting military spending. Should hesucceed. he might be followed by othergovernments in similarly dire economicstraits."

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(208) State of the World-1984

PRIORITIES: BACK TO THEDRAWING BOARD

The mounting economic stresses of re-cent years make it clear that existingpolicies and priorities are not workingwell. In the absence of a massive reord-ering of prioritiesone that shifts natu-ral resources and political energies fromthe arms race to efforts to brake worldpopulation growth, to protect the agro-nomic and biological resource systems,and to spur the energy transitioneco-nomic conditions will almost certainlycontinue to deteriorate.

In many ways the human prospect istied to two transitionsfrom primarydependence on fossil fuels to a relianceon renewable energy resources, andfrom an equilibrium of high birth anddeath rates to one of low birth and deathrates. Completion of the former involvesa restructuring of the global economy;the latter depends on basic changes inreproductive behavior.

As things are now going, the humanprospect is being shaped by populationgrowth, by the depletion of both renew-able and nonrenewable resources, andby the arms race. Advances such as bio-technology, microcomputers, and theassociated electronics revolution aresure to help shape the future, but thedominant influence will be the basic pro-cesses used to produce energy and food.German novelist Gtinter Grass elo-quently made this point in a lecture: "Tobe sure, we can make great new discov-eries with our technological skill andscientific abilitywe can split the atoms,see to the end of the universe, and reachthe moon. But these milestones ofhuman progress occur in the midst of asociety sunk in a statistically proven barbarism. All those atom-spiitters, thoseconquerers of space, those who punctu-ally feed their computers and gather,store and evaluate all their data; none is

224

in a position to provide sufficient foodfor the children of this world."ss

Faltering development strategies inthe Third World can succeed only if theyare reoriented. Auto-centered develop-ment models borrowed from the indus-trial countries and left over from the ageofoil serve the needs of a small minority,an affluent elite. As Soedjatmoko, an In-donesian and rector of the United Na-tions University in Tokyo, has observed,industrial growth needs to be redirectedtoward meeting the needs of the major-ity.% Such an industrial strategy wouldfocus less on large tractors and more ontwo-wheel power tillers, less on automo-biles and more on motor scooters andbicycles, less on nuclear power plantsand more on simple solar water heaters.To be successful, each country needs toforge its own industrial developmentstrategy, one responsive to its particularneeds and circumstances.

A successful transition from fossilfuels to renewable energy will require afar more energy-efficient economy thannow exists. In the past, developing countries everywhere could simply emulatethe oilcentered energy economies ofthe industrial countries. Now as theybegin to move away from petroleum to-ward renewables, each country must tai-lor its energy plan to its indigenous en-dowment of replenishable energyresources. The transition to renewablescan endow an economy with a perma-nence that oil-based societies lack. Itcould also lead the world away from theexisting inequitable, inherently unstableinternational oil regime because renewable energy sources are locally availablein all countries.

Completing the demographic transidon to low birth and death ratesisclearly possible, as a dozen countrieshave demonstrated. These societieshave eliminated population growth as asource of ecological stress and resourcescarcity. Not surprisingly, these 12 coun-

Reshaping Economic Policies (209)

tries with zero population growth havehighly equitable income distributions,all ranking near the top internationally.Their improvement in economic and so-cial conditions has been so pervasivethat tto special effort was needed tobring population growth to a halt. Othermajor industrial countries outsideEurope, such as the United States andthe Soviet Union, however, have notreached zero population growth and donot yet have apolicy for doing so. Withinthe Third World some countries aremaking steady progress in bringingdown birth rates, but only a few haveadequate programs. If these countriesare to stop population growth within anacceptable time frame, vigorous nationalleadership and strong incentives forsmaller families will be required. Gov-ernments that fail are likely to see theirefforts to improve living conditionsoverrun by the growth in human num-bers.

Given the obvious impact of rapidpopulation growth on human welfare, itis inexcusable that an estimated two-thirds of all couples in the Third World,excluding China, still lack ready accessto family planning services. An es-timated fourfold increase in family plan-ning expendituresfrom $920 millionto $3,700 millionis needed to makepopulation stabilization a realistic goal.This increase of $2,800 million repre-sents less than two days' worth of globalmilitary expenditures at the 1983 rate .35

In the simplest terms, we are in a raceto see if we can slow, and eventually halt,population growth before local life-sup-port systems collapse. And we are in arace to reverse the nuclear anus buildupbefore we self-destruct. For many, thethreatened decline in living standardshas become a reality. Some countrieshave tried to postpone such declines bygoing heavily into debt. But over thelong term, only a basic reformulation ofdevelopment strategies, including popu-lation policies, will save us. It is nolonger a matter of tinkering with priori-ties. Only a thorough reordering will do.

The future is both discouraging andhopeful. With whole continents ex-periencing a decline in living standardsthere is ample ground for pessimism.The worldwide loss of momentum inimproving living conditions is not en-couraging. Yet the problems we faceare of our own making, and thus withinour control. On the optimistic side,every threat to sustainability has beensuccessfully addressed by at least a fewcountries. Even without any further ad-vances in technology every major prob-lem can be solved, every major humanneed satisfied. The issue is not technol-ogy or resources, but awareness andpolitical will. Whether the future isbright and promising or dark and bleakhinges on how quickly we can mobilizepolitically to bring about the changes inpolicies and priorities that circum-stances call for.

225

Notes

Chapter 1. Overview

I. impliiations of the phrase "nuclearwinter," coined by research scientist RichardP. Turco of R & D Associates. Marina delRay. Calif., were discussed by Carl Sagan atthe Conference on the Long-Term World-wide Biological Consequences of NuclearWar, Washington. D.C., October 31- Novem-ber 1. 1983. For the principal conference pa-pers. see Science. December 23. 1983.

2. World oil consumption data arc fromAmerican Petroleum Institute (API). Basic Pe-troleum Data Book (Washington, D.C.: 1983)with 1983 estimates by Worldwatch Tnstitutebased on "Midyear Review and Forecast." Oiland Gas journal. July 25, 1983.

3. OECD projections of 1985 generatingcapacity are from international EnergyAgency (IEA). World Energy Outlook (Paris:Organisation for Economic Co-operationand Development. 1982): reactor cancella-tions in the U.S. are from Atomic IndustrialForum, Washington. D.C., private communi-cation. November 14. 1983.

4. This illustration compares the amountof nuclear electricity and firewood purchasedby end users in 1982, expressed in equivalentenergy units. Nuclear power data and con-version factors are from U.S. Department ofEnergy (DOE), Energy information Adminis-tration (EIA), 1982 Annual Energy Review(Washington, D.C.: 1983). Wood use esti-mate is from US. Department of Agriculture(USDA) and DOE. A Biomass Energy Productionand Use Plan for the United States. 1983-90. Ag-ricultural Economic Report No. 505 (Wash-

ington, D.C.: 1983). Increase in U.S. wooduse is from DOE. Estimates of US. Wood EnergyConsumption from 1949 to 1981 (Washington,D.C.: U.S. Government Printing Office,1982).

5. California Energy Commission. "LargeCalifornia Wind Projects Installed in 1981and 1982," and "Large-Scale CaliforniaWind Projects Planned for 1983." Sac-ramento. Calif.. unpublished. 1983. Residen-tial electrical needs estimated by WorldwatchInstitute.

6. The current status of alcohol fuels inBrazil is reviewed by James Bruce. "Brazil'sAlcohol Export Prospects Shrink But Domes-tic Mart Continues Growth." journal of Com-merce. April 5. 1983, and "Brazil's AlcoholProject Flourishing." journal of Commerce,June 1, 1983: for a more critical review. seePeter T. Kilborn. "A Switch to Alcohul AsAutomobile Fuel is Gaining in Brazil." NewI'm* Times. November 12. 1983.

7. For waste paper recovery in the Nether-lands and Japan. see United Nations Foodand Agriculture Organization (FAO), Secre-tariat. Advisory Committee on Pulp andPaper. "Waste Paper Data 1978-80." pre-pared for 22nd session of Advisory Commit-tee, Rome, May 25-27, 1981: U.S. containerdeposit legislation is .eviewed in William K.Shireman et al.. Can and Bottle Bills: the

CalP1RG-BLS Study Group Report (Stanford.Calif.: California Public Interest ResearchGroup and the Stanford Environmental LawSociety. 1981): for worldwide recycling ofaluminum, see Leonard L. Fischman, World

226

Notes (211)

Mineral Trends and V. S Supply Problems (Wash-ington. D.C.: Resources for the Future. 1980)and The Aluminum Association. Inc., Mums-num Statistical Review for 1981 (Washington.D.C.: 1982).

8. For a review of China's population poli-cies, see H. Yuan Tien. "China: Demo-graphic Billsonaire."Popiation Iiii 'kiln (Wash-ington, D.C.: Population Reference Bureau.April 1983).

9. Estimate of India's ultimate stationarypopulation is from World Bank, World Devel-opment Report 1983 (New York: Oxford Uni-versity Press. 1983).

10. South Korea's reforestation programis discussed in Erik Fckholm. Planting for theFuture: Forestry for Human Needs (Washington.D.C.,: Worldwatch Institute. February 1979);Gujarat's program is described in MadhavGadgil, S. Narenda Prasad. and Rauf Ali,Forest Management an India: A Cntecal Review(Bombay: Centre for Monitoring IndianEconomy, 1982).

11. For topsoil loss, see calculations inChapter 4. "Conserving Soils."

12. Based on grain production data for re-gions where grain is consumed directlyrather than converted into livestock pro-ducts, reported in USDA. Economic Re-search Service (ERS), World Indices of Agri-cultural and Food Production 1930-1982(unpublished printout) (Washington. D.C.:1983).

13. Grain export data are from USDA.Foreign Agricultural Service (FAS), ForeignAviculture Circular FG- 13 -82. Washington.RC., April 1982; oil export data are fromU.S. Central Intelligence Agency. interna-tional Energy Statistical Review (Washington,D.C.: 1982), and British Petroleum Com-pany. BP Statistical Review of World Energy(London; 1982).

14. World military expenditures are fromStockholm International Peace Research In-stitute. World Annaments and Disarmament,S1PR1 Yearbook 1983 (New York: Taylor &

Francis. Inc., 1983). Per capita expenditurewas calculated with world population fromPopulation Reference Bureau, 1983 WorldPopulation Data Sheet (Washington, D.C.:l983).

15. Developing countries imported arma-ments in 1980 worth some $19.5 billion andwheat and coarse grains valued at $19.45 bil-lion. Arms import data are from Ruth LegerSivard. World Military and Social Expenditures1983 (Washington. D.C.: World Priorities.1983); grain import data are front USDA,FAS, Foreign Agriculture Circular FG-28-83.Washington, D.C.. September 1983.

16. Sivard, World ,Military and Social Expen-ditures

17. For a discussion of the relation of ad-vanced recovery techniques to future oil pro-duction levels, see WA, World Energy Outlook;for a review of the range of estimates of ulti-mately recoverable reserves, see RichardH cede, A World Geography of Recoverable CarbonResources in the Context of Possible Climatic Change

(Boulder. Colo.: University of Colorado andNational Center for Atmospheric Research.1983).

18. Estimate of excessive soil erosion inthe United States is based on total acreageaffected by sheet and rill erosion from USDA.Soil and Water Resources Conservation Act 1980Appraisal, Part 11 (Washington, D.C.: 1980).and acreage in Great Plains states affected bywind erosion from USDA. Soil ConservationService. and Iowa State University StatisticalLaboratory. Basic Statistics 1977 National Re-sources Inventory, Statistical Bulletin No. 686(Washington, D.C.: 1982).

19. FAO, Forest Resources Division, Trop-ical Forest Resources, Forestry Paper 30 (Rome:1982).

20. George H. Tomlinson and C. Ross Sil-verside', Acid Depositon and Forest Damage-theEuropean Linkage (Montreal, gpe.: Domtar.Inc.. 1982).

21. Council on Environmental Quality.Environmental Quality /982 (Washington.

227

(232) Notes

D.C.: U.S. Government Printing Office,1983).

22. FAO, Production Yearbook (Rome: an-nual. various years).

23. FAO, Yearbook of Fishery Statistics(Rome: annual. various years).

24. For a review of the value of geneticresources, see "Genes from the Wild,"Earthscan Briefing Document No. 36, Earth.scan. Washington, D.C. , 1983.

25. Statistics on the world tanker fleet canbe found in Shipping Statistics and Economics(London: H. P. Drewry, Ltd., monthly); for adiscussion of shipbreaking, see Roger Viet-voye, "Scrapping Supertankers.** Ott and Gasformal. February 14, 1983.

26. Robert J. Enright, **World Oil Flow,Refining Capacity Down Sharply'. ReservesIncrease," Oil and Gas Journal. December 27,1982.

27. Figure on unemployment in the autoindustry is from U.S. Department of Trans-portation, The 1.".S. ,Automobile Industry. 1980(Washington. D.C.: 1981); U.S. and Japaneseauto production data are from Motor VehicleNlanufacturers Association. Motet. Vehicle Factsand Figures 82 (Detroit. Mich.: 1982).

28. Data on auto dealers are from U.S. Bu-reau of the Census, Census of Retail Trade(Washington. D.C.: various years); data ongasoline service stations are from National Pe-troleum News Fact Book (Chicago. Ill: HunterPublishing Co.. 1983).

29. Estimate of solar equipment sales inCalifornia is from Jerry Yude!son, Solar Ini-tiative. Oakland, Calif., private communica-tion, November 11..1983: for alcohol fuels inBrazil, see Bruce, "Brazil's Alcohol ExportProspects Shrink," and "Brazil's AlcoholProject Flourishing"; the resurgence of thebicycle during the seventies is discussed inLester R. Brown, Christopher Flavin, andColin Norman, Running on Empty: The Futureof the Automobile in an Oil-Short World (NewYork: W. W. Norton & Co., 1979).

30. Imports and recovery of scrap paper inSouth Korea and Mexico are discussed inWilliam U. Chandler, Materials Recycling: TheVirtue of Necessity (Washington, D.C.: World-watch Institute, October 1983); the electricarc furnace is discussed in U.S. Officeof Technology Assessment. Technology andSteel industry Contpetsuveness (Washington,D.C.: U.S. Government Printing Office,1980).

31. For the role of Siberia in the Sovietaluminum industry, see Theodore Shabad,"The Soviet Aluminum Industry," RowMaterials Report, March 1983.

32. James Bruce, "Brazil May Join TopAluminum Producers," Journal of ContmermJuly 16. 1983.

33. The collapse of the Peruvian anchovyfishery is discussed in Erik Eckholm, LosingGround: Environmental Stress and World FoodProspects (New York: W. W. Norton & Co.,1976); for statistics on the fish catch in Peruand other countries, see FAO, Yearbook ofFakery Statistics.

34. USDA. Soil and Water Resources Comer-vation Act ( RCA). Summary of Appraisal, Parts Iand 11. and Program Review Draft 1980 (Wash-ington, D.C.: 1980).

35. Economic Report of the President (Wash-ington, D.C.: U.S. Government PrintingOffice, 1983).

36. Ibid.

37. Developing country and Eastern blocdebt estimates by Worldwatch Institutebased on various press reports.

38. Nigeria data are from FAO, Country Ta-bles of Production, Trade and Consumption of For-est Products, Africa 1970-1980 (Rome: 1982).

39. James L. Rowe, Jr., "Latin AmericaLoans Taking Toll on Banks," WashingtonPest, November 6, 1983.

40. World Bank, World Debt Tables (Wash-ington, D.C.: 1983).

4

Notes

41. International Monetary Fund. MonthlyFinancial Statistics 1980 and 1983 Yearbooks(Washington, D.C.: 1980 and 1983); GeneralAgreement on Tariffs and Trade. Interna-tional Trade 1982/ 1983 (Geneva: 1983).

42. World oil consumption data are fromAPI, Baser Petroleum Data Book; world oil tradedata are from British Petroleum Company.BP Statistical Review.

Chapter 2. Stabilizing Population

I. Information on growth rates, referredto throughout this chapter, and other demo-graphic parameters for international com-pansun can be found in Population Refer-ence Bureau, World Population Data Sheet(Washington. D.C.: annual).

2. Population growth in recent years is re-vie ed in the United Nations, Department ofInt ationat Economic and Social Affairs(DI .SA). World Population Trends and Pohnes-1981 hlonitoring Report. Volume 1, PopulationStudies. No. 79 (New York: 1982); 1983 esti-mates are from Population Reference Bu-reau. World Population Data Sheet.

3. Population Reference Bureau, World

Population Data Sheet.

4. Stephen Rapawy and Godfrey Baldwin,"Demographic Trends in the Soviet Union:1950-2000," in Joint Economic Committee.U.S. Congress. Soviet Economy in the 1980s:Problems and Prospects (Washington. D.C.: U.S.Government Printing Office, 1983); Centrefor Monitoring Indian Economy. Baste States-ties Relating to the Indian Economy Vol. 2: States(Bombay: 1982).

5- Population Reference Bureau. World

Population Data Sheet.

6. Ibid.

7. H. Yuan Tien, "China: DemographicBillionaire." Population Bulletin (Washington.D.C.: Population Reference Bureau, April,1983); United Nations DIESA. Demographic

(213)

Yearbook Special Issue Historical Supplement(New York: 1979).

8. John Knodel. Nibhon Debavalya. andPeerasit Kamnuansilpa. "Thailand's Con-tinuing Reproductive Revolution," Interna-tional family Planning Perspectives, September1980: Peerasit Kamnuansilpa, AphichatChamratrithirung, and John Knodel, "Thai.land's Reproductive Revolution: An Up-date," International family Planning Perspectives,June 1982.

9. Henry P. David. "Mechai's Way.' People(London). Vol. 9, No. 4, 1982.

10. Sergio Diaz-Briquets and LisandruPerez. "Cuba: The Demography of Revolu-tion," Population Bulletin (Washington, D.C.:Population Reference Bureau, April 1981);Henry P. David, "Cuba: Low Fertility. Rela-tively High Abortion," intercom, PopulationReference Bureau. Washington, D.C.,July/August 1983.

11. Terence H. Hull, V.J. Hull. and M.Singarimbun, "Indonesia's Family PlanningStory: Success and Challenge." PopulationBulletin (Washington. D.C.: Population Ref-erence Bureau. November 1977); GeoffreyMcNicoll and Masri Singarimbun. "FertilityDecline in Indonesia I: Background andProximate Determinants." and "Fertility De-cline in Indonesia II: Analysis and Interpreta-tion," Center for Policy Studies Working Pa-pers, Nos. 92 and 93 (New York: PopulationCouncil. 1982).

12. John S. Nagel. "Mexico's PopulationPolicy Turnaround," Population Bulletin(Washington. D.C.: Population ReferenceBureau. December 1978): Jorge MartinezManautou. ed.. The Dnnographie Revolution inMexico 1970-1980 (Mexico City: Mexican In-stitute of Social Security. 1982).

13. Debbie C. Tennison, "Europe is Ad-justing to a Long Recession That SomeEconomists See as Permanent." Wall StreetJournal, December 2, 1982.

14. Economic Commission for Africaquote and World Bank assessment both from

229

(2141 holes

World Bank. Sub.Suhurate Afnca: Progress Re-

port on Development Prospects and Programs(Washington. D.C.: 1983)

15. Population Reference Bureau, WorldPopulation Data Sheet.

16. U.S. Depanment of Agriculture(USDA). Economic Research Service (ERS),World indices of Agricultural and Food Production,1950-82 (unpublished printout) (Washing-ton, D.C.: 1983).

17. World Bank, Accelerated Development inSub-Saharan Afrwa: An Agenda for Action

(Washington, D.C.: 1983).

18. Quoted in John Harte and RobertSoeolow. eds.. The Patient Earth (New York:Holt. Rinehart and Winston. 1971).

19. United Nations. Prospects of Population:Methodology and Assumptions, Population Stud-ies No. 67 (New York: 1979).

20. Estimates of hypothetical stationarypopulations are from World Bank. World De-velopment Report 1983 (New York: OxfordUniversity Press. 1983); current-year popula-tions are from Population Reference Bureau,World Population Data Sheet.

21. See, for example. Lester R. Brown andPamela Shaw, Six Steps to a Sustainable Society(Washington, D.C.: Worldwatch Institute,March 1982). For oil production trends, seeChapter 3 of this report; grain productiontrend is from USDA. ERS, World indices.

22. Council on Environmental Qualityand U.S. Department of State. The Global2000 Report to the President, Volume 1 (Washing-ton. D.C.: U.S. Government Printing Office.1980).

23. Wassily Leontief et al., The Future of theWorld Economy (New York: Oxford UniversityPress, 1977).

24. Gerald 0. Barney and Associates, Ar-lington. Va., private communication, Octo-ber 26, 1983.

25. Tien, "China: Demographic Billion.aire."

26. Elizabeth J. Cron, "Production VersusReproduction: A Threat to China's Develop-ment Strategy." World Development, June1983.

27. See, for example. John Ratcliffe."Kerala: Testbed for Transition Theory,"Populi, U.N. Fund for Population Activities.New York. Vol. 5, No. 2, 1978. DavidWinder, "Literacy-the third world's beaconof hope." Christian Science Monitor, May 12,1983. and W. Parker Maudlin, "The Determi-nants of Fertility Decline in DevelopingCountries: An Overview of the Available Evi-dence," lnternahonal Family Planning Perspec-tives, September 1982.

28. Author's estimate. based on BruceStokes, Filling the Family Planning Gap (Wash-ington. D.C. : Worldwatch Institute, May1977) and subsequent progress in familyplanning programs in China and other coun-tries.

29. Robert Lightbournejr.. and SusheelaSingh. with Cynthia P. Green, "The WorldFenility Survey: Charting Global Childbear-ing," Population Bulletin (Washington. D.C.:Population Reference Bureau, March 1982);Mary Mederios Kent and Ann Larson, "Fam-ily Size Preferences: Evidence From theWorld Fertility Surveys," Reports on the WorldFertility Survey 4 (Washington, D.C.: Popula-tion Reference Bureau. April 1982).

30. Nuray Fincancioglu, "Carrots andSticks," People (London),Vol. 9, No. 4,1982.

31. Ibid.

32. Pi.chao Chen, "11 M Chinese Opt forOnly One Child Glory Certificate," People

(London), Vol. 9. No. 4, 1982; Planned Par-enthood Federation of Korea, New PopulationPolicy in Korea: Social and Legal Support for Small

Families (Seoul; 1982): Saw Swee.Hock, Populotion Control for Zero Growthin Singapore (Sin.gapore; Oxford University Press. 1980).

33. Figures on current payments in Indiaare from Pravin Visaria and Leela Visaria,

230

Votes (215)

"India's Population: Se( und and Grommg."Population Bulletin (Washington. D.C.: Popu-lation Reference Bureau. October 1981); In-dian wage data are from Centre for Monitor-ing Indian Economy, Basic Statistics: Ban-gladesh information is from Michael Jordan.U.S. Department of State. Washington. MC.,private commumcation. January 5. 1983.

34. Judith Jacobsen, Promoting PopulationStabilization; Incentives for Small Families(Washington, D.C.: Worldleatch Institute.June 1983).

35. For an early review of community in,centives. see Lenni W. Kangas. "IntegratedIncentives for Fertility Control." Same, Sep-tember 25. 1970: effuns in Thailand aredescribed in Henry P. David. "Incentives,Reproductive Behavior, and IntegratedCommunity Development in Asia," Studies

in Family Planning. May 1982; Indonesianefforts are described in Hull. Hull. and Sin-garimbun. 'Inclunesia's Family PlanningStory."

Chapter 3, Reducing Dependence en Oil

I. World oil consumption data are esti-mates of demand for refined petroleum pro-ducts from American Petroleum Institute(AP1). Basic Petroleum Data Book (Washington.D.C.: 1983), The 40 billion barrel estimate isbased on a projection of 7 percent annualgrowth in consumption from the 1973 worldoil consumption of 20.4 billion barrels.

2. The projection of hypothetical world oilconsumption is based on the growth rate described in note I; proven reserves of oil arefrom API, Basic Petroleum Data Book; estimateof ultimately recoverable reserves.is from M.King Hubbert. "World Energy Resources,"presented to the Tenth Commonwealth Min.ing and Metallurgical Congress, Ottawa,Canada. 1974.

3, Robert U. Ayres. for Oak Ridge Na-tional Laboratory. Worldwide Transportation/Energy Demand Forecast: 1975-2000 (Spring.

field. Va : National Technical InformationService. 1978).

4. Patricia Smith. U.S. Department of En-ergy (DOE), Washington, D.C., private com-munication, June 15, 1983.

5. DOE. Energy Information Administra-tion (EIA), 1982 / maid Eneigy Review (Wash-ington, D.C.: 1983).

6 API, Basic Petroleum Data Book; DOE,EIA, Monthly Energy Review. Washington,D.C.. August 1983: per capita consumptioncalculated with U.S. population data fromU.S. Department of Commerce. Bureau ofthe Census, Statistical Abstract of the (AntedStates. 1982-83 (Washington, D.C.: U.S.Government Printing Office. 1982).

7. DOE. EIA. 1982 Annual Energy Review.

8. Philip F. Palmedo and Pamela Baldwin,The Contribution of Renewable Resources andEnergy Conservation As Alternatives to importedOil in Developing Countries (Port Jefferson,N.Y.: Energy/Developmen, International,1980).

9. For example. coal delivered to powerplants in 1980 at $28.76 per short ton (con-taining 21.3 million Btu) had an energy-con-tent cost of $1,35 per million Btu. Residualfuel oil (#6) at 55.10 per gallon in 1980 and5.8 million Btu per 42-gallon barrel carriedan energy content cost of $3,97 per millionBtu. From DOE, EIA, 1982 Annual Energy Re-view.

10. DOE. EIA. 1982 Annual Energy Review.

11. See Chapter 8, "Rivers of Energy," inDaniel Deudney and Christopher Flavin, Re-newable Energy: The Power to Choose (New York:W.W. Norton & Co., 1983). and World Bank,Energy Department, "The Energy Transi-tion in Developing Countries," Report No.4442, Washington. D.C.. April 15, 1983.

12. See Chapter 7, "Nuclear Power," inInternational Energy Agency (IEA), WorldEnergy Outlook (Paris: Organisation for Eco-nomic Co-operation and Development.1982).

231

(216) Votes

13. Kenneth E. Skog and Irene A. Waiter-son, Residential Fru !wood Vie in the United Slates:1980-81 (Madison, Wisc., Forest ProductsLaboratory, U.S. Forest Service. U.S. Depart-ment of Agriculture, 1983).

14. Romanian oil production from DOE.EIA, International Energy Annual 1981 (Washington, D.C., 1982): reviews of Soviet energyconsumption patterns and fuel substitutionstrategies arc found in Jonathan B. Stein."Soviet Energy." Energy Policy. December1981. and in Thane Gustafson. "Soviet En-ergy Policy." and Laurie Kurtzweg and Al-bina Tretyakova. "Soviet Energy Consump-tion: Structure and Future Prospects." bothin Joint Economic Committee, U.S. Con-gress, Soviet Economy in the 1980v Problems andProspects (Washington. D.C.: U.S. Govern-ment Printing Office, 1983).

15. Estimates of alcohol production forautomotive fuels in Brazil are from WorldEnergy Industry. The Energy Decade 1970-80(Cambridge. Mass.: Ballinger Publishing Co.,1982). with estimates for 1980-82 by World-watch Institute based on data in "Brazil's Al-cohol Export Prospects Shrink But DomesticMart Continues Growth," Journal of Commerce.

April 5. 1983, and "Brazil's Alcohol ProjectFlourishing," Journal of Commerce, June 1.1983.

16. Emil Parente. Fluor Corporation. Ana-heim, Calif.. private communication. August17, 1983.

17. DOE. EIA. International Energy Annual1981.

18. "Towards a Minimum Oil Economy;Progress of Eight Countries," OECD Observer,July 1981.

19. B. H. S. Jayewardene. managing edi-tor. Ceylon Daily News. private communica-tion. August 27. 1979.

20. A blueprint for achieving the energyefficiency potential of buildings is outlined inAvraham Shama, "Energy Conservation inU.S. Buildings." Energy Policy, June 1983.

232.. .

21. Lee Schipper and Andrea Ketoff."Home Energy Use in Nine OECD Coun-tr;es, 1960-80," Energy Policy, June 1983.

22. "Towards a Minimum Oil Economy,"OECD Observer, Lester R. Brown, Building a

Sustainable Society (New York: W.W. Norton &Co. 1981); Information Office, Embassy ofFrance. Washington, D.C.> private communi-cation, June 2, 1981.

23. "Japan Advances in Diversifying En-ergy Sources." Oil and Gas Journal, January18, 1982.

24. John Vinocur, "Germans Insist onSpeed," New York Times, July I, 1979.

25. "Towards a Minimum Oil Economy."OECD Observer.

26. Jose Goldemberg. "Energy Policies inBrazil," Economic and Political Weekly. Febru-ary 26, 1983.

27. Gustafson, "Soviet Energy Policy."

28. Ibid.; Kurtzweg and Tretyakova. "So-viet Energy Consumption."

29. Istvan Dobozi. "The 'Invisible' Sourceof 'Alternative' Energy," Natural ResourcesForum, July 1983.

30. Vaclav Smil, "Energy Development inChina," Energy Polity, June 1981.

31. DOE, EIA, 1982 Annual Energy Review;"Midyear Review and Forecast," Oil and GasJournal. July 25. 1983.

32. IEA, World Energy Outlook.

33. Ibid.

34. DOE, EIA, 1982 Annual Energy OutlookWith Projections to 1990 (Washington, D.C.:1983); Canadian survey from IEA, World En-ergy Outlook; "Slow Growth Seen for Syn-thetic Fuels." Oil and Gas Journal, May 2.1983.

35. J.C. Barros. Petrobras, New York,N.Y., private communication, October 3.1983; William Orme, Jr.. "Mexico RaisesGasoline Prices." Journal of Commerce. April 8.

Notes (217)

1983; "Yugoslavia Begins Gasoline Ration-ing to Counter Shortage," Won Street Journal.October 11, 1982; "Poles Facing FurtherCuts in Gasoline," Journal of Commerce. Sep-tember 30, 1983.

Chapter 4. C stserving Soils

1. Anson R. Bertrand, "Overdrawing theNation's Research Accounts," Journal of Soiland Water Conservation, May /June 1980.

2. The :mpact of land degradation on thepatterns of daily life is made powerfully clearin "The Fragile Mountain." a documentaryproduced by Sandra Nichols and shown onthe PBS series Nova on October 19, 1982.

3. P. 0. Aina et al., quoted in R. Lal,"Effective Conservation Farming Systems forthe Humid Tropics," in American Society ofAgronomy, Sod Erosion and Conservation in theTropics. ASA Special Publication No. 43(Madison, wisc.: 1982).

4. S. A. El- Swaify and E. W. Dangler,"Rainfall Erosion in the Tropics: A Stateof-the-Art," in American Society of Agronomy,Soil Erosion.

5. These and other conservation practicesintroduced in the thirties are discussed inDonald Worster, The Dust Bowl (New York:Oxford University Press. 1979), especially inChapter 14, "Making Two Blades of GrassGrow."

6. Figures on summer fallow are from U.S.Department of Agriculture (USDA), Eco-nomic Research Service (ERS), Economic In-dicators of the Farm Sector Production and Effi-fumy Stars us, 1981 (Washington, D.C.: U.S.Government Printing Office, 1983).

7. Kenneth Grant, "Eror'on in 1973-74:The Record and the Challenge," Journal ofSoil and Water Conservation, January/Februarl975., USDA, Soil Conservation Service, and!ma State University Statistical Laboratory,Basic Statistics 1977 National Resources inven-tory. Statistical Bulletin No. 686 (Washing-ton, D.C.: 1982).

8. USDA, ERS. "World Agriculture Out-look and Situation," Washington, D.C., June1983.

9. Wouter Tim. :germ Optioru for Long-Term Development (ualtimore. Md.: JohnsHopkins University Press, for the WorldBank, 1974).

10. John M. Schiller et al., "Developmentof Areas of Shifting -ultivation in NorthThailand 'Thai-Australia Land DevelopmentProject.' " in American Society of Agronomy,Soil Erosion.

11. R. F. W'atters, Shifting Cultivation inLatin America (Rome: United Nations Foodand Agriculture Organization. 1971).

12. Sheldon Judson. "Erosion of theLand, or What's Happening to Our Conti-nents," American Scientut, July/August 1968.

13. Jiang Degi et al., "Soil Erosion andConservation in the Wuding River Valley"(Beijing, China: Yellow River ConservancyCommission, April 1980), cited in El-Swaifyand Dangler, "Rainfall Erosion in the Trop-ics"; U.S. Water Resources Council, The Na-tion's Water Resources 1975-2000, Volume 2:Water Quantity. Quality and Related Land Consid-

erations (Washington, D.C.: U.S. GovernmentPrinting Office, 1978).

14. Ganges data from American Society ofAgronomy, Sod Erosion: Mississippi data fromU.S. Water Resources Council, The Nntion'sWater Resources 1973-2000.

15. J. M. Prospero et al., "AtmosphericTransport of Soil Dust from Africa to SouthAmerica." Nature, February 12, 1981.

b. Josef R. Parrington et al.. "Asian Dust:Seasonal Transport to the Hawaiian Is-lands," Science, April 8, 1983.

17. Data on soil loss from water erosionare from USDA, The Soil and Water ResourcesConservation Act: 1980 Anna:sat, Part /1 (Wash-ington, D.C.: 1980); data on wind erosion arefrom USDA, National Resources Inventory. The"excessive" loss of topsoil from wind erosionis probably understated when using the five-

233

(218) .Voles

tonper-acre standard because of the slowerrate of formation of Great Mains soils and thediminished opportunity to offset productivitylosses with additional fertilization.

18. K. G. Teiwani. Land Use ConsultantsInternational. New Delhi. private conimuni.cation. July 3, 1983: Centre for Science andEnvironment. The Slate Of India's Environment1982 (New Delhi: 1982).

19. Quoted M Vera Rich. "Soil First." Na,bre. February 12. 1982.

20. Abandoned cropland figure cited isfrom U.S. Central Intelligence Agency.V IS R Agricultural Alfas (Washington. D.C.:1974: Thane Gustafson. 'TransformingSoviet Agriculture Brezhnev's Gamble onLand Improvement." Public Policy, Summer1977.

21. P. Poletayev and S. Yashukova. "Envi-ronmental Protection and Agricultural Pro,duction." nonoinika Sershogo Khozyaystva

(Moscow)., November 1978.

22. P. S. Tregubov. "Soil Rainstorm Ero-si in and Its Control in the U.S.S.R.." pre-sented to the International Conference onSO Erosion and Conservation. Honolulu.Hawaii, January 16-22. 1983: U.S erosionrates are from USDA, National Resources Inven-tory.

23. National Soil Erosion-Soil Productiv-ity Research Planning Cne..mittee. USDA.Science and Education Administration. "SoilErosion Effects on Soil Productivity: A Re-search Perspective." Journal of Soil and WaterConservation. March/April 198I.

24. Ibid.

25. G. W. Langdale et al.. "Corn Yield Re-duction on Eroded Southern PiedmontSoils." Journal of Soil and Water Conservation.September/October 1979.

26. W. E. Larson, F. J. Pierce,, and R. H.Dowdy, "The Threat of Soil Erosion toLong-Term Crop Production," Saence. Feb-ruary 4. 1983.

234

27. Research by R. Lal of the InternationalInstitute of Tropical 4..culture. lbadan,Nigeria. cited by El-Swaify and Dangler."Rainfall Erosion in the Tropics." Even morepronounced yield reductions are investigatedin J. S. C. Mbagwu. R. Las. and T. W. Scott."Effects of Desurfacing on Alfisols and Ul-tisols in Souther:4 Nigeria 1: Crop Perform-ance," unpublished.

28. EI-Swaify and Dangler. "Rainfall Ero-sion in the Tropics." The effects of environ-mental degradation on the life span of theMangla Reservoir are discussed in Erik Eck-holm. Losing Ground: Environinnital Stress andWorld Food Prospects (New York: W.W. Norton& Co., 1976).

29. U.S. Agency for International Devel-opment. Environmental and Natural ResourceManagement in Developing Countries: A Report toCongress (Washington. D.C.: 1979).

30. Eckholm, Losing Ground.

31. B. B. Vohra. Land and Water Manage-ment Problem in India, Training Volume 8(New Delhi: Ministry of Home Affairs. 1982).

32. Dr. Frank Wadsworth. "Deforest... in-Death to the Panama Canal," in U.S. De-partment of State,. Office of EnvironmentalAffairs. Proceedings of the V .S Strategy Conference

on Tropical Deforestation. June 12-14, 1978(Washington, D.C.: 1978).

33. A comprehensive introduction to thetechniques and advantages of conservationtillage is provided M William A, Hayes, Mini-mum Tillage Farming and H. M. Young, No-Tillage Farming (bound in one volume)(Brookfield, Wisc.: No-Till Farmer. Inc.,1982).

34. Robert J. Gray, American FarmlandTrust, statement before the Subcommitteeon Conservation. Credit and Rural Devel-opment. Committee on Agriculture, U.S.House of Aepresentatives, Washington,D.C., May 4, 1983.

35. Poletayev and Yashultova. "Environ-mental Protection."

4Votes (219)

36. National Sod ErosionSoil Proclisctsv-fty Research Planning Committee. "Soil Ero-sion Effects on Soil Productivity."

37. The ErosionProductivity Impact Cal-culator is described in USDA. Soil Conserva-tion Service, National Bulletin No. 450.3.5.Washington, D.C., January 17, 1983. TheProductivity Index (PI) is descrihed in Lar-son. Pierce. and Dowdy, "The Threat of SoilErosion to Long-Term Crop Production."International work on the PI is being co-ordinated by the International Federationof Institutes for Advanced Study (IRAS)program. "Analyzing Biospheric Change."Delft. The Netherlands,

38. Roosevelt's personal commitment tososI ronservation and particularly to the shel-terbelt idea is recalled in Richard Strout."Windbreaks: FOR Legacy," Christian ScienceMonism, February 8, 1982.

39. B. B. Vohra. "Managing India's Landand Water Resources," Ministry of Petro-leum. New Delln, August 1978.

40, Alfredo Sfeir-Younis. Agriculture andRural Development Department. WorldBank, private communication. May 26, 1982.

41, Lloyd K. *:Ischer, discussion com-ments. in Harold G. Halcrow. Earl 0. Heady.and Melvin L. Cotner. eds.. Sod ConservationPolicies, Institutions and Incentives (Ankeny,Iowa: Soil Conservation Society of America.1982).

42. Ken Co.ok. "Surplus Madness." fourna/of Soil and Water Conservation, January/Febru-ary 1983,

43. Symposia papers of the I 2th Interna-tional Congress of Soil Science, February 8-16, 1982. were published as Desertification andSoils Policy (New Delhi: Indian Society of SoilScience. 1982). Proceedings of the Interna-tional Conference on Soil Erosion and Con-servation, January 16-22. 1983. should beavailable in 1984: abstracts of papers pre..sensed at the conference can be obtainedfrom the Department of Agronomy and Soil

Science. University of Hawaii at Mama.Honolulu, Hawaii. Prnceedings of the ASAsymposium were published in American So-ciety of Agronomy. Soil Erosion.

Chapter 5. Protecting Forests

I. United Nations Food and AgricultureOrganization (FAO). Forest Resources Divi-sion. Tropical Forest Resources, Forestry Paper30 (Rome: 1982).

2. FAO Forest Resources Division. Train-ed Forest Resources; United Nations Environ-ment Programme, "The Global Assessmentof Tropical Forest Resources," Nairobi.Kenya. April 1982.

3. Norman Myers, Consultant in Environ-ment and Development, "Comments on'Global Forests' by Roger A. Sedjo and Mar-ion Clawson," Oxford. England. June 1983.

4. Norman Myers. Conversion of TropicalMout Forests (Washington, D.C.: NationalAcademy of Sciences. 1980); Robert J. A.Goodland. "Environmental Ranking of Am-azonian Development Projects in Brazil,"Environmental Conservation. Spring 1980.

5. FAO Forest Resources Division. Tropi-cal Forest Resources.

6. Madhav Gadgil, S. Narenda Prasad, andRauf Ali. Forest Management in India: A CriticalReview (Bombay: Centre for Monitoring In-dian Economy, 1982).

7. John S. Spears. "Small FarmersOrthe Tropical Forest Ecosystem? A Brief Re-view of Sustainable Land Use Systems forTropical Forest Areas," presented to Inter-national Tropical Forestry Symposium, YaleUniversity. New Haven, Cnnn., April 15-16.1980; Michael Arnold, "New Approaches toTropical Forestry: A Habitat for More ThanJust Trees," Ceres. September/October 1979:John I. Zerbe et al., for Forest Products Labo-ratory, U.S. Forest Service. U.S. Departmentof Agriculture (USDA), Forestry Activities andDeforestation Problems in Developing Countries

(no Notes

(Washington. 1) C.. t: S. Government Prin-ting Offire. 1980).

8. Spears. "Small Farmers-Or the Tropi-cal Forest Ecosystetn?"

9. FAO Forest Rsourres I iv,sion. Tropi-t0; Forest Resources. Myers. Courntion of Tropi-cal Moist Forests

10. Zerhe et al.. Forestry Activities in Develop-ing Countries.

1 1. %cm. Conversion of Tropnal Moist For-ests.

12 L' S. Depanment of Slate. InteragenryTask Forre on Tropical Forests. The World'sTiopwal Forests: .4 Polny. Strategy. and Programfor the United State, (Washington. D.C.: U.S.Government Printing (Mice. 1980).

13. 11...ers. COMV71111$1 of Tropical Moist For-

ests. Norman ht)erc. 1-Limburger Con-nection How Central Anerira% Forests ik-corne North Amen Ifambnrgers." Ambit).

Vol X. No. 1. 1981

14 Mers. Conversion of Tropical Moist For-ests,

!S. FAO Forest Resourres Division, Tropi-

cal Forest Resolvers.

16. Erik Erkholm. Planting for the Future:Forestry for Human Needs ( Washington.Worldwatch Institute. February 1979).

17. Myers. Goit..crsiou of Tropical Moist Per-

ms

18. FAO Finest Resources Division. TroPi-rat Forest Resources

19. Myers. Conwrsibit of Tropical Most For-ms.

20. The Federal Minister of Food, Agri-culture. and Forestry, "Forest Damage Dueto Air Pollution: "the Situation in the FederalRepuhlir of Germany," Bonn. West Ger-many. November 1982; results of 1983 forestsurvey are described in "One-Third of Ger.man Trees Hit By Aid Rain," New Scientist.Ociel rr 27, 1983.

21. George H. Tomlinson and C. Ross Sil-versides. And Deposition and Forest Damage-theEuropean Linkage (Montreal, Que.: Domtar,Inc.. 1982).

22. Eugeniusz Pudlis. "Poland's Plight:Environment Damaged from Air Pollutionand Arid Rain," Ambw. Vol. XII, No.2, 1983.

23. Hubert W. Vogelmann. "Catastropheon Camels Hump." Natural History. Novem-ber 1982.

24. Federal Minister of Food, Agriculture,and Forestry. "Forest Damage Due to AirPollution."

25. Vogelmann, "Catastrophe on CamelsHump."

26. Gene E. Likens et al., "Acid Rain,"Snentific Anierwan. Ortober 1979.

27. Federal Minister of Food, Agriculture,and Forestry. "Forest Damage Due to AirPollution. "'

28. Gregory S. Wetstone and Armin Ro-senrranz. And Rain in Europe and North Amer-wa: National Responses to an international Nob-km (Washington. D.C.: Environmental LawInstitute, 1983).

29. National Research Council, Commit-tee on the Atmosphere and the Biosphere,Atmosphere - Biosphere interactions: Toward A Bet-ter Understanding of the Ecological Consequenres ofFossil Fuel Combustion (Washington, D.C.: Na-tional Academy Press. 1981).

30. National Research Council. Atmosphere-

Biosphere Interactions.

31. Bernhard Ulrich, "Dangers for theForest Ecosystem Due to Acid Precipitation,"translated for U.S. Environmental ProtectionAgency by Literature Research Company,Annandale. Va., undated.

32. Vogelmann, "Catastrophe on CamelsHump."

33. Debate between John Fraser, M.P..and John Madigan. U.S. Representative.Washington. D.C., October 25. 1982.

236

MA'S (221)

34. Vogelmann, "Catastrophe on CamelsHump."

35. John J. Metzler, "Germany BattlesAcid-Rain Pollution." Journal of Commerce,April 13, 1983: Dr. Heinz D. Gregor, WestGerman Federal Environmental Agency, dis-cussion at Acid Rain Panel, Global Tomor-row Coalition Conference, Washington,D.C.. une 2, 1983.

36. Swedish Ministry of Agriculture, Envi-ronment '82 Committee, Acidification Todayand Tomorrow (Stockholm: 1982).

37. FAO, Regional Tables of Production. Tradeand Consumption of Forest ProductsWorld, Eco-nomy Classes and Regions: 1970-1980 (Rome:1982),

38. National Academy of Sciences, Fire-wood Crops: Shrub and Tree Species for EnergyProduction (Washington, D C.: 1980); Fck-holm, Planting for the Future.

39, FAO, Forest Resources Division, ForestProducts Prom 1962-1981, Forestry Paper 38(Rome: 1982),

40. Ibid.; Vandana Shiva, H.C. Sharat-chandra, and J. Band yopadhyar, Social, Eco-nomic and Ecological Impact of Social Forestry inKolar (Bangalore: Indian Institute of Man-agement, 1981).

41, FAO Forest Resources Division, ForestProducts Prices, 1962-1981.

J. FAQ Forest Resources Division, Tropi-cal Forest Resources.

43, Gadgil, Prasad, and Ali, Forest anage-ment In India

44, John Spears, "Preserving WatershedEnvironments," L'rrasylva, No. 137, 1982.

45. National Environmental ProtectionCouncil, Philippine Environmental Quality 1977,First Annual Report (Manila: 1977),

46. Earthscan Briefing Document No.34A, Earthscan, Washington, D.C., May1983; Catherine Caufield, Tropreai Moist For-

ests: The Resource,, the People, the Threat (Lon-don: Earthscan, 1982).

47. Myers, Conversion of Tropical Moist For-ests; George Ledec, "The Political Economyof Tropical Deforestation," presented to theSecond World Congress on Land Policy,Cambridge., Mass., June 20-24, 1983; FAOForest Resources Division, Tropical Forest Re-sources.

48. S. L. Pringle, "Tropical Moist Forestsin World Demand, Supply, and Trade." Una-sylva, Nos. 112-113, 1976.

49. Myers, Conversion of Tropical Moist For-ests.

50, Pringle, "Tropical Moist Forests";Alan Grainger, "The State of the World'sTropical Forests," The Ecologist, January/February 1980.

51, FAO Yearbooks of Forest Products(Rome; 1975 and 1981); FAO, Country Tablesof Production, Trade and Consumption of ForestProducts (Rome: 1982).

52. Pringle, "Tropical Moist Forests."

53. Ledec, "Political Economy of TropicalDeforestation"; Indonesian wood processingplans noted in Unasylva, No, 135, 1982,

54. Ricardo Ortiz, "An Interview withMarco Antonio Flores Rodas," Assistant Di-rector-General. FAQ Forestry Department,Ceres, July/August 1981.

55. Eckholm. Planting for the Future; ErikEckholm, I WICEF and the Household Fuels Cri-sis (New York: UNICEF, 1983).

56. Gadgil, Prasad, and Ali, Forest Manage-ment in India.

57. Shiva. Sharatchandra, and Bandyo-padhyay. Social Forestry in Kolar; VandanaShiva, H. C. Sharatchandra, and J. Ban-dyopadhyay. "Social ForestryNo Solutionwithin the Market," Ecologist, July/August1982.

58. Shiva, Sharatchandra, and Bandyo-padhyay, Social Forestry in Kolar.

237

(322) Notes

59. Prem Shankar jha. "Farm ForestryUnder Attack: Equity Versus Growth." Timesof India. August 2. 1983.

60. Turi Hammer. "Reforestation andCommunity Development in the Sudan." En-ergy in Developing Countries Series. Re-sources for the Future. Washington. D.C..September 1982. unpublished.

61. Calestousjuma. "Kenya: The Popula-tion Explodes and Fuelwood Disappears."Unasylva, No. 135. 1982.

62. R. Hosier et al.. "Energy Planning inDeveloping Countries: Blunt Axe in a Forestof Problems?." Alibi°. Vol, Xl, No. 4. 1982;Bina Aganval. "Diffusion of Rural Innova-tions; Some Analytical Issues and the Case ofWood-Burning Stoves." World Development.April 1983.

63. Michael Arnold, "New Approaches toTropical Forestry: A Habitat for More thanjust Trees." Ceres. September/October 1979.

64. Ibid.; Zerbc et al.. Forestry Activities inDeveloping Countries.

65. Spears. "Small Farmers-Or theTropical Forest Ecosystem?"

66. John Spears. "Preserving WatershedEnvironments," Unasylva, No. 137. 1982;Spears. "Small Farmers-Or the TropicalForest Ecosystem?"

67. Roger A. Sedjo "The Potential of US.Forestlands in the World Context." preparedfor Conference on Coping with Pressures onU.S. Forestlands. Resources for the Future.Washington, D.C., March 30-31, 1981.

68. FAO Forest Resources Division. Tropi-cal Forest Resources.

69. Data for these calculations are fromIbid. and FAO. Regional Tables of Production.Trade and Consumption; the population projec.lion is from Population Reference Bureau.1983 World Population Data Sheet (Washing-ton. D.C.: 1983).

70. FAO. Forest Resources Division, WorldForest Products: Demand and Supply 1990 and2000, Foresty Paper 29 (Rome: 1982).

238

71. lbid.

72. "Big Log Sales to China Questionablein the Future." Journal of Commerce. June 24.1983.

73. FAO Forest Resources Division. WorldForest Products: Demand and Supply 1990 and2000.

74. Noel D. Vietmeyer. "Tropical TreeLegumes: A Front Line Against Deforesta-tion," Ceres. September/October 1979; Na-tional Research Council. Mangium and OtherAcacias of the Humid Tropics (Washington.D.C.: National Academy Press, 1983); Na-tional Research Council. Calliandra: A Versa-tile Small Tree for Me Humid Tropics (Washing-ton. D.C.: National Academy Press. 1983);Elbert L. Little. jr.. Common Fuelwood Crops: A

Handbook for Their Identification (Morgantown.W. Va.: Communi-Tech Associates, un-dated).

75. Vietmeyer. "Tropical Tree Legumes ";National Research Council, Mangium andOther Acacias; National Research Council, Cal-/iamb-a; Little, Common Fuetwi d Crops.

76. Norman Myers. "Stand and Deliver:Tropical Moist Forests." IDRC Reports, April1981.

77. John Spears and Montague Yudelman,"Forests ire Development." Finance and Devel-opment, December 1979; "The FAO ForestryDepartment's Programme of Work and Bud.get for 1982-83." Unasylva. No. 135. 1982;Spears, "Small Farmers-Or the TropicalForest Ecosystem?"

78. Ortiz, "Interview with Marco AntonioFlores Rodas."

Chapter 6. Recycling Materials

1. See John H. Gibbons and William U.Chandler. Energy: The Conservation Revolution(New York: Plenum Publishing Company.1981).

2. The analogy of the beverage containerwas first suggested by energy educator John

Notes (223 )

Yegge,, formerly of Oak Ridge AssouatedUniversities, Oak Ridge, Tennessee.

3. William E. Franklin, Marjorie Franklin,and Robert Hunt, Waste Paper The Future of aResource (New York: Franklin Associates andthe American Paper institute, 1982).

4. Some controversy exists regarding thecarcinogenicity of benzopyrene.

5. Derived from R.C. Ziegler et al., "Envi-ronmental Impacts of Virgin and RecycledSteel and Aluminum," National TechnicalInformation Service, Springfield, Va.. 1976.

6. U.S. Office of Technology Assessment,Wood Use. t' S Competitiveness and Technology(Washington, D.C.: U.S. Government Prin-ting Office, 198$).

7. See "Wood and Plant Materials," So-me, February 21, 1976, National Academy ofSciences, Renewable Resources for IrsditstralMaterials (Washington, D.C.: 1976), EdgarGaertner, "La Mom de la Foret," Le MondeDtplomatique. August 1983, and Chapter 5 ofthis report.

8. Marion Clawson, The Economics of U.S.Nonindustrial Private Forests (Washington,D.C.: Resources for the Future. 1979).

9. Thomas E. Ricks, "Timber Firms Mov-ing to the South As Supplies in NorthwestDiminish," Wall Street Journal, August 19,198$.

10. Franklin, Franklin, and Hunt, WastePaper. The Future of a Resource

11. J. Rodney Edwards. American PaperInstitute, New York, private communica-tions, June 1983: Hershel Cutler, executivedirector. Institute of Scrap Iron and Steel,Washington, D.C., private communication,July 1983.

12. United Nations Food and AgricultureOrganization (FAO), Secretarial, AdvisoryCommittee on Pulp and Paper, "Waste PaperData 1978-80," prepared for 22nd session ofAdvisory Committee, Rome, May 25-27,1981.

13. Lester R. Brown, Building A SustainableSorry (New York. W.W. Norton & Co.,1981).

14. Organisation for Economic Co-opera-tion and Development (OECD), Economy In-struments in Solid Waste Management (Paris:1981).

15. The Clean Japan Center, Saikurts NoChuhiki (Tokyo: 1983).

16. OECD, Economic Instruments in SolidWaste Management.

17. Clean Japan Center, Saskurts No CM-shiki.

18. Geoffrey Murray, "Putting 220 tons ofgarbage a day where ii belongs," ChristianScience Monitor, March 10, 198$.

19. OECD, Waste Paper Recovery(Paris:1979).

20. OECD, Economic Instruments in SolidWaste Management.

21. Janet Marinelli, "Recycling's LittleVictories," Environmental Action, April 1982;Richard Hertzberg, "Islip, New York: WhereMandatory Recycling Works," Resource Recy-

cling (Portland, Ore.), May/June, 1983; Eliza-beth Gallagher, Assistant to the Commis-sioner of Environmental Control, Islip, NewYork, private communication, August 12,1983.

22. Richard Hertzberg, "NA RI's Look atState and Local Recycling Laws," Resource Re-cycling (Portland, Ore.), November/December 1982; OECD, Economic Instruments in SolidWaste Management; "W. Germany's waste ex-change expands to nearby countries," World

Environment Report, January 30, 1982.

23. Secretariat, FAO Advisory Commit-tee, "Waste Paper Data"; Franklin, Franklin,and Hunt, Waste Paper: The Future of a Resource.The value of waste paper trade is estimatedby using actual unpublished American PaperInstitute data for U.S. exports and assumingthat 90 percent of gross world trade in wastepaper is American.

239

t

( 224 ) Notes

24. Frankhn, Franklin, and Hunt. WastePaper: The Future of a Resource.

25. See Ibid.

26. Franklin. Franklin, and Hunt, WastePaper: The Future of a Resource.

27. John M. Bradley. "Cairo's GarbageCollectors Get Big World Bank Loan." WorldEnvironment Report, September 30, 1982;World Bank. press release. Washington,D.C.. May 22, 1980.

28. Representative Ron Wyden (D-Ore-gon). "Use of Recovered Materials By Fed-eral Agencies," fact sheet, Washington, D.C.,May 10, 1983, describing H.R. 2867, amend-ing the Resource Conservation and RecoveryAct of 1976. 90 STAT. 2795; Daniel Saltz-man. Legislative Assistant to RepresentativeWyden, Washington. D.C.. private communi-cation. August 12. 1983; Marinelli. "Recy-cling's Little Victories."

29. :.dwards. private communications.

30. Mary Lou Van Deventer. "WhateverHappened To Recycling?," Not Man Apart.January 1983.

31. U.S. Office of Technology Assess-ment. Industrial Energy Cse (Washington,D.C.: U.S. Government Printing Office.1983).

32. Celso Furtado, "Dette exterieure: queltype de renegotiation ?," Le Monde Diploma-ague, August 1983.

33. The Aluminum Association, Inc., Mu-llin= Statistical Review for 1981 (Washington.D.C.: 1982).

34. See William U. Chandler. The Myth ofTVA; Conservation and Development in the Tennes-see Valley, 1933-1983 (Cambridge, Mass.:Ballinger Publishing Co.. 1984).

35. Aluminum Association. Aluminum Sta-tistical Review for 1981.

36. Ibid.; Bureau of Mines, U.S. Depart-ment of Interior. Minerals Yearbook, 1981, Vol-ume 1 (Washington, D.C.: U.S. GovernmentPrinting Office, 1982).

37. Aluminum Association. Aluminum &a-moral Review for 1981.

38. Brown. Building A Sustainable Society.

39. Bureau of Mines. Minerals Yearbook,1981, Volume III.

40. David Solomon. "Dam blocked inAustralia's hottest environmental dispute."Christian Science Monitor, July 6, 1983.

41. Al Trumer,, "Italy Set To Abandon ItsAluminum Industry," Journal of Commerce,July 21.1982; "Italian Ministry Grants Aid toAluminum Industry." journal of Commerce. Au-gust 6. 1982.

42. Aluminum Association, Aluminum &a-moral Review for 1981; Bureau of Mines, Min-erals Yearbook, 1981,, Volume III.

43. Bureau of Mines, Minerals Yearbook,1981. Volume III.

44. Aluminum Association, Aluminum Sta-tistical Review for 1981; Bureau of Mines. Min-erals Yearbook, 1981, Volume 111. The figure of360 was the price of "old cast scrap" in April1983. This price is down from 430 in June of1979. Organisation of European AluminumSmelters. Aluminum Smelters: EuroPe, Japan,USA (London: 1983).

45. Aluminum Association. Aluminum &a-toned Review for 1981.

46. Organisation of European AluminumSmelters. Aluminum Smelters.

47. Aluminum Association. Ammon Sta-tistical Review for 1981.

48. "Reverse Vending Machines," ResourceRecycling (Portland. Ore.), November/December 1982; "Aluminum Recovery? CanDol." Sweden Now, February 1982.

49. "Community Recycling Update." Re-source Recycling (Portland. Ore.), November/December 1982.

50. William K. Shireman et al., Can andBottle B .s: The CalPIRG-ELS Study Group Re-port (Stanford. Calif.: California Public Inter-est Research Group and the Stanford Envi-

2 4 0

Setts (225 )

ronmental Law Society. 1981); U.S. GeneralAccounting Office, "Statcs Expenerice withBeverage Container Deposit Laws ShowsPositive Benefits." Washington. D.C., De-cember I I, 1980.

51. "Is Recycling the Tin Can a Can ofWorms?... Phoenix Quarterly, Spring 1977.

52, Suggested by Frank X. McCawley,physical scientist, Division of NonferrousMetals. Bureau of Mines. U.S. Department ofInterior. Washington. D.C., private commu-nication. July 14. 1983.

53. This was the central purpose of the"World Aluminum Industry Study." accord-ing to Alfredo Damniert. a principal re-searcher on the project. World Bank, Wash-ington. D.C.. pnvate communication. August1 1, 1983.

54. Derived from Bureau of Mines. Miner-air Yearbook, 1981, Volume 111.

55. This figure represents automotivescrap as a percentage of an iron and steelproducts scrapped (that is, "becoming ob-solescent") in the United States in the periodof a year. according to an estimate for 1974in U.S. Office of Technology Assessment.Teehmeal Options for Conservation of Metals. CaseStudies of Selected Metals and Products (Washing-ton. D.C.: U.S. Government Printing Office.1979).

36. "Near-Record 21 Million Tons of Fer-rous Discards Added to Scrap Backlog. in1981," Phoenix Quarterly, Winter 1983; DenisHayes, Repairs. Raise. Recycling-First Steps To-ward a Siutairiable Society (Washington. D.C.:Worldwatch institute, September 1978).

.57. Leslie Wayne. "The Going GetsTough at the Nucor !Minimal," New ForkTimes. August 7, 1983.

58. Donald Barnett. World Bank. privatecommunication. July 14, 1983; Bureau ofMines, Mintrais rearbook, 1981. Volume 111.

59. Bureau of Mines. Minerals Yearbook,1981, Volume 1.

60. U.S. Office of Technology Assess-ment. Technology and Steel lndtaby Competitive-ness (Washington. D.C.: U.S. GovernmentPrinting Office, 1980).

61. "Zinc Die Cast-Autos Are UsingLess, But Shredders Are Recovering More,"Phoenix Quarterly. Winter 1983; Leslie R.Parkes, "Metals Face an Uncertain Future."Sew Scientist July 14, 1983; Cutler. privatecommunication. August 11, 1983.

62. C.L. Astedt, 'The Recovery of CarHulks in Sweden." in OECD. Economic instru-ments in Solid Waste Management; J. Thompson."The Recovery of Car Hulks in Norway," inOECD. Economic instruments in Solid WasteManagement

63. Thompson. "Recovery of Car Hulks inNorway"; Astedt. "Recovery of Car Hulks inSweden."

64. William T. Hogan. World Steel in She1980s: A Cost of Survival (Lexington. Mass.:Lexington Books. 1983).

Chapter 7. Reassessing the Economicsof Nuclear Power

1. International Energy Agency. World En-

ergy Outlook (Paris: Organisation for Eco-nomic Co-operation and Development.1982).

2. International Atomic Energy Agency.the Annual Report for 1982 (Vienna: 1983).

3. "Nuclear: World Status," FinancialTimes Energy Economist. January 1983.

4. Peter deLeon, Development and Diffusionof the Nuclear Power Reactor: A Comparative Anal-

Ws (Cambridge, Mass.: Ballinger PublishingCo.. 1979); Arnold Kramish, Atomic Energy inthe Soviet rnton (Stanford. Calif.: StanfordUniversity Press. 1959).

5. R. L Perry et al., Development and Com-mercialization of the Light Miter Reactor. 1946-1976 (Santa Monica, Calif.: Rand Corpora-tion, 1977).

241

(226) Notts

6. Atomic Industrial Forum, "HistoricalProfile of U.S. Nuclear Power Development."Washington. D.C.. March 1983.

7. Irvin C. Bupp and Jean-Claude Dei ian.Light Water Now the Nuclear Dream Dissolved(New York: Basic Books Inc.. 1978).

8. James Everett Katz and Onkar S. Mar-wah. eds.. Nuclear Power in Developing Countries(Lexington. Mass.: Lexington Books. 1982).

9. Atomic Industrial Forum, "Interna-tional Survey-Annual," Washington, D.C.,various years.

10. QuotedWater

in Bupp and Derian. Light

11. Atomic Industrial Forum, "HistoricalProfile."

12. Charles Komanoff, Power Plant Cost Es-calation Neickar and Coal Capital Costs, Regula-tion and Economics (New York: Komanoff En-ergy Associates. 1981).

13. Ramesh N. Budwani, "Power PlantScheduling, Construction and Costs: 10-YearAnalysis." Power Engineering. Augusi 1982:Charles Komanoff, private communication.New York, N.Y.. September 19,1983. Thesefigures were confirmed by Richard Rosenusing the data base of the Energy SystemsResearch Group. Boston. private communi-cation. September 27, 1983.

14. Cost figures for individual plants werecompiled from press reports and personalcommunications with utilities by WorldwatchInstitute and are current as of late 1983. Allcost figures are in current dollars unless oth-erwise indicated.

15. Richard A. Rosen, "Testimony Beforethe Indiana Public Service Commission," Oc-tober 4. 1982. based on Energy Systems Re-starch Group statistical data.

16. R. G. Easterling. Statistical Analysis ofPower Plant Capacity Factors Through 1979(Washington. D.C.: U.S. Nuclear RegulatoryCommission, 1981): Steve Thomas. World-wide Nuctear Plant Performance Revisited: An

Analysis of 1978-1981 (Brighton, England:Science Policy Research Unit. University ofSussex. 1983).

17. These figures are Worldwatch Insti-tute estimates based on the construction costfigures described earlier and on operation-and-maintenance and capacitrfactor figurescompiled by Energy Systems ResearchGroup and Komanoff Energy Associates. Oilprices are assumed to rise at a 3.5 percentannisal real rate beginning in 1986 and to hit850 per barrel (1983 dollars) by the year2000. Coal prices are assumed to rise at a 2percent annual real rate. Generating costfigures are levelized costs over the lifetime ofa power plant.

18. Figure based on a nuclear generatingcost of 11 0 per kilowatt-hour that, with trans-mission and distribution costs and linelosses. comes to a delivered price of 14.30per kilowatt-hour. This compares with aU.S. average retail electricity price in 1983of 6.10 per kilowatt-hour, according to U.S.Department of Energy (DOE). Energy In-formation Administration (EIA), Monthly En-ergy Review., Washington, D.C.. September1983.

19. S. David Freeman. "Nuclear PowerIsn't Scary-These Reactors Are." Washing-ton Post. November 28. 1982.

20. Central Electricity Generating Board.The Case for the Sitwell 13 Nuclear Power Station(London: 1982); "British PWR Can CutCosts," Nuclear Engineering international. June1982.

21. Gordon Mackerron. "Nuclear Powerand the Economic Interests of Consumers,"Electricity Consumers' Council. London.June 1982; Gordon Mackerron. "A Case NotProven." New Scientist. January 13. 1983.

22. J.W. Jeffery. "The Real Cost of Nu-clear Electricity in the U.K.." Energy Policy.

June 1982; J.W. Jeffery. 'An Economic Cri-tique of the CEGB's Statement of Case for aPWR at Sizewell," University of London. un-published. June 1983.

242

Sates

23. Gunter Marquis, "Experience withNuclear Power Plant Investment Costs in theFederal Republic of Germany and ExpectedFuture Electricity Production Costs." pre-sented to the International Conference onNuclear Power Experience, Vienna. Septeni.ber 13-17., 1982.

24. Jurgen Franke and Dieter Vielhues.Das Erode Des Dagen eitontsiroms (Koln. WestGermany: Institut Freiburg, 1983).

25, Leonard L. Bennett. Panos M.Karousakis, and Georges Moynet, "Review ofNuclear Power Costs," presented to the In-ternational Conference on Nuclear PowerExperience, Vienna, September 13-17.1982; Charles Komanoli. "Nuclear PowerCosts: American Answers, French Ques-tions," Kornanoli Energy Associates, NewYork. N.Y., 1981; "Even with IncreasedCosts, EDF Finds Nuclear Far Cheaper thanCoal." Nuckomes Week, January 27., 1983.

26. "Electricite de France Spent 9.768i1,lion Francs in 1981," Nuckorius Week, Febru-ary 25. 1982; "EDF Reschedules Debt.''Euro-peon Energy Report, January 21, 1983,

27. Japanese figures are unpublished esti-mates from Central Research Institute ofElectric Power industry.,Tokyo, private com-munication. August 9, 1983. and an interviewwith the executive vice-president of TokyoElectric Power Company, Astaweek, August12, 1983: Soviet figure is from "ComeconPresses Forward While the West Hesitates,"Financial Tunes Energy Economist, August 1983:A. M. Yu and D. L S. Bate, "'Trends in theCapital Costs of CANDU Generating Sta-tions." presented to the International Con-ference on Nuclear Power Experience,Vienna. September 13-17, 1982; OntarioHydro, Cost Comparison of CA.VDV Nuclear& Coal Fueled Generating Stations (Toronto:1982); Indian data are from Bennett.Karousakis. and Moynet.,"Review of NuclearPower Costs."

28. Atomic Industrial Forum, "HistoricalProfile."

(227)

29. Atomic Industrial Forum, Washing-ton, D.C., private communication, November14, 1983,

SO. DOE. Nuclear Plans Cancellations: Causes.Costs, and Consequences ( Washington, D.C.:1983).

31. DOE, EIA, Monthly Energy Review:"33rd Annual Electrical Industry Forecast,"Eleancal World. September 1982.

32. "1983 Annual Statistical Report,"Electrical World, March 1983; additional dataare from unpublished documents of the Edi-son Electric Institute and the American Pub-lic Power Association; these numbers werecompared with capital expenditure figures inU.S. Bureau of the Census, Annual Survey ofManufacturers (Washington, D.C.: 1983).

33, U. Nesse, "The Effect of NuclearOwnership on Utility Bond Ratings andYields," Battelle Pacific Northwest Labora-tory, Richland. Wash., February 1982; Leon-ard Hyman. "Utility Industry: CongressionalHearings on Nuclear Energy." Merrill Lynch,Pierce, Fenner & Smith Inc.. New York, Oc-tober 26. 1981.

34. "Midland Deal Comes Unglued," En-ergy Daily. July 19, 1983.

35. Stuart Diamond, "Shoreham: WhatWent Wrong?." Newsday, December 6. 1981:Ron Winslow, "Lilco's Bid to Spread NuclearCosts Riles Customers and State Officials."Wall Street Journal, September 1, 1983.

36. "Economic Factors Engulf Seabrook,"Sew York Times, September 12, 1983.

37. Atomic Industrial Forum. "A.I.F,'s1982 Midyear Outlook." press release.Washington. D.C.,July 1982; DOE, U.S. Com-mercial Nuckar Power: Historical Perspective, Cur-rent Status and Outlook (Washington. D.C.:1982).

38. William Drozdiak, "Greens' Power:West German Party Forces Nuclear Issue,"Washington Post, February 19, 1983; John Ta-gliabue, "West Germans Clash At Site of A-Plant." New York Tunes. March 1, 1981.

243

(228) ,Votes

39. William Walker and Mans Lonnroth,Nuclear Power Struggles: Industrial Competitionand Proliferation Control (London: GeorgeAllen & Unwin, 1983).

40. "West Germany: Can a Nuclear 'Con-voy' Run Over Its Opposition?," BusinessWeek, August 9, 1982; information on con-cern within the West German utility industryis from Florentin Krause. Friends of theEarth, San Francisco, Calif., private commu-nication. September 28, 1983.

41. "World List of Nuclear Power Plants."Nuclear News, biannual, various dates; Inter-national Atomic Energy Agency. Annual Re-port: Irvin C. Bum "The French NuclearHarvest: Abundant Energy or Bitter Har-vest?... Technology Review, November/Decem-ber 1980; Mitterand quote from JudithMiller, "Paris Pushes Drive for Atomic En-ergy: Socialist Government Has Only SlightlyChanged Program Undertaken by Giscard."New York Times, March 14. 1982.

42. "French Energy: Forecasts Fall." Na-me, November 1 1. 1982; "Study Group'sCall for French Nuclear Retrenchment SendsShock Waves," Nucleonics Week, May 19.1983; "Nuclear Power: Cooling Off," TheEconomist. July 30. 1983; "French PlannersAccused of Cheating." European Energy Re-port. September 30. 1983; "EDF SeekingMaximum Flexibility in Operation of Its Nu-clear Units," Nucleonics lVeek, February 17..1983

43. t'..DF Reschedules Debt," EuropeanEnergy Report, January 21. 1983; "StudyGroup's Call for French Nuclear Retrench-ment Sends Shock Waves" Nucleonics lVeek;"France Eases Up on Pace of N.Power,"European Energy Report, August 5, 1983;"Framatome is Bracing for EmploymentProblems Beginning in Mid-1984," NucleonicsWeek, November 4, 1983.

44. Andrew Holmes, "Sizewell InquiryReveals U.K. Policy Vacuum." Financial TimesEnergy Economist, October 1983: Czech Con-roy, "Why Britain Does Not Need a PWR,"New Scientist. August 19. 1982.

244

45. "Nuclear: World Status," FinancialTimes.

46. "Comecon Nuclear Industry Set forRapid Expansion," European Energy Report,July 8, 1983; Peter Holt. "Nuclear Power inEastern Europe: Progress & Problems." En-ergy in Countnes with Planned Economies, De-cember 1981; Tom Sealy. "Comecon PressesForward," Financial Times Energy Economist,August 1983.

47. Sealy, "Comecon Presses Forward."

48. "Problems Hit U.SS.R. Nuclear Con.struction Industry." European Energy Report,August 5. 1983; Mark Wood. "Reactor PlantMishap Hinted as by Soviets," 1VashingtonPost, July 21, 1983.

49. John W. Powell, "Nuclear Power inJapan," bulletin of the Atomic Scientists, May1983; "Nuclear Power: What Role in Asia?,"Asiaweek, August 12, 1983.

50. "A Nuclear Power Plant in JapanSprings a Radioactive Leak," World businessWeekly, May 11. 1981; Henry Scott Stokes,"For Japan. Sudden Nuclear Misgivings,"New York Times, May 17, 1981.

51. Powell, "Nuclear Power in Japan."

52. International Atomic Energy Agency,Market Survey for Nuclear Power in DevelopingCountries: General Report (Vienna: 1973),

53. "World List of Nuclear Power Plants,"Nuclear News, August 1983; Jane House."The Third World Goes Nuclear," South, De-cember 1980.

54. Richard J. Barber Associates, LDC Nu-clear Power Prospects, 1975-1990: Commercial,

Economic & Security implications (Washington.D.C.: U.S. Energy Research and Develop-ment Administration, 1975).

55. John J. Metzler, "Taiwan ExtendsQuest for Nuclear Power," Journal of Gom-mercr. March 8. 1982; "KEPCO ShelvingConstruction of Nos. 11. 12 Nuclear PowerPlants," Korea Herald, July 17, 1982.

Notes

56. S. Jacob Scheer. "Nuclear Power in thePhilippines." in Katz and Marwah. NuclearPower in Developing Countries: Christopher S.Wren. "China Is Building Atom PowerPlana." New York Timm September 30. 1982.

57. R. R. Subramanian and C. RapMohan, "Nuclear Power in India." in Kaizand Marwah. Nuclear Power in Developing Coun-tries: Trevor Drieberg. "India's Nuclear Pro-gram Encountering Difficulties." Journal ofCommerce. November 4. 1982.

58. Katz and Marwah. Nuclear Power in De-veloping Countries; House., "The Third World;oes Nuclear": Eliot Marshall. "Iraqi Nu-clear Program Halted by Bombing," Science.October 31, 1981; Muriel Allen. "Egypt Re-thinking Plans for Reactors Due to SafetyFears." Journal of Commerce. May 5. 1981.

59. Jackson Diehl. "Ambitious ArgentineNuclear Development Program Hits Snags."Washington Post. August 31. 1982.

60. Victoria Johnson. "Nuclear Power inBrazil," in Kaiz and Marwah, Nuclear Power inDeveloping Countries; Richard House. "Brazil:Nuclear Road to the Future Takes a Turn forthe Worse." Financial Times Energy Economist.May 1983; "Mexico Having Difficulty Com-pleting Even One Nuclear Unit." NucleonicsWeek, June 23. 1983.

61. Estimate based on nuclear plantsunder construction and operating in mid-1983. as listed in "World List," Nuclear News

62. Atomic Industrial Forum, annual pressreleases on international outlook. Washing-ton. D.C.. various years; Nuclear EnergyAgency. Nuclear Energy and Its Fuel Cycle(Paris: Organisation for Economic Co-opera-tion and Development. 1982).

63. Ronnie D. Lipschutz. Radioactive Waste.Politics. Technology and Risk (Cambridge.Mass.: Ballinger Publishing Co.. 1980); SallyHindman. Decommissioning Policies for NuclearPower Plants: A Critical Examination (Washing-ton. D.C.: Critical Mass. forthcoming).

64. DOE. EIA. Monthly Energy Review.

(229)

65. Solar Energy Research Institute. ANew Prosperity: Building a Renewable Future (An-dover. Mass.: Brick House. 1981).

66. Douglas Cogan, Generating Energy Alter-natives At America's Electric Vtilities (Washing-ton. D.C.: Investor Responsibility ResearchCenter Inc.. 1983).

67. Jordan quote is from Ibid.: electricitytrends are from International EnergyAgency, World Energy Outlook, and reports invarious newsletters.

68. Renewable energy cost figures areWorldwatch Institute estimates based on var-ious sources: see Daniel Deudney and Chris-iopher Flavin. Renewable Energy: The Power toChoose (New York; W.W. Norton & Co.,1983).

Chapter 8. Developing Renewable En-ergy

1. International Energy Agency. Energy Re-search. Development and Demonstration in the 1E4

Countries, 1981 Review of National Programmes(Paris: Organisation for Economic Co-opera-tion and Development. 1982).

2. For a detailcd view of wind power de-velopments in recent years. see ChristopherFlavin. Wind Power: A Turning Point (Washing-ton, D.C.: Worldwatch Institute, July 1951).

3. Carl Aspliden. U.S. Department of En-ergy (DOE). private communication, une 4.1981.

4. Grant Miller, "Assessment of LargeScale Windmill Technology and Prospectsfor Commercial Application." working papersubmitted to National Science Foundation.Washington. D.C., unpublished. September8. 1980.

5. Elizabeth Baccelli and Karen Gordon.Electric Odd" Solar Energy Activities: 1981 Sur-vey (Palo Alto. Calif.: Electric Power Re-search Institute. 1982).

6. American Wind Energy Association."AWEA Listing of Publicly Announced

245

(230) Notes

Windfarm Projects," Arlington, Va., unpub-lished, August 1983.

7. Donald Marier, "Wind Farms Boom orBust," Alternative Sources of Energy, May/June1983; David Hoffman. "Windfarm GiantPlanning Even Greater Expansion," Renew.able Energy News, February 1983.

8. Vaughn Nelson, "State of the SWECSIndustry in the United States," Wind PowerDigest. forthcoming, 1984; David Hoffman."Dutch and Danish Turbines Make Inroadsin U.S.." Renewable Energy News, April 1983.

9. Interviews by Christopher Flavin withvarious California wind farm developers, pri-vate communications, September 1983.

10. Robert Lowe. "Expected ElectricityCosts for the U.S. Mod-2 Windmill," EnergyPolity, December 1980.

II. For the details of these calculationssee Flavin, Wind Power: A Turning Point.

12. "Dreams Blow Away in the Breeze,"Washington Post, August 15,1983; Glen Price,Farallones Institute, Occidental, Calif., pri-vate communication. September 8, 1983.

13. "Dutch to Build 10MW Windfarm."World Solar Mar/lets, March 1982; Bent Sor-ensen. "Turning to the Wind," American SU-,entist. September/October 1981; Judy Red-rearm "The Prospect for Ocean-GoingWindmills," Nature, April 24, 1980.

14. K. Dharmarajan, "IndiaEnergy Sup-ply Policy Management," Natural ResourcesForum, July 1983; DOE, Estimates of l',S. WoodEnergy Consumption from 1949 to 1981 (Wash-ington, D.C.: U.S. Government PrintingOffice, 1982),

15. Thomas B. Johansson et al.. "SwedenBeyond Oil: The Efficient Jse of Energy,"Science, January 28. 1983; "The Cold. HardFacts," Sweden Now, No. 4, 1981; StevenMoore, "Sweden Readies Forests in RapidConversion to Bio-Energy," and "Pulp andPaper Lead Swedish Switch to Wood Fuel,"Renewable Energy News, April 1982; "Energy

and Energy Policy in Sweden," The SwedishInstitute, Stockholm, January 1980.

16, Vera Rich. "Finland Turns to Woodand Peat for Energy," Nature, April 5, 1979.

17. H. Swain, R. Overend, and T.A. Led-well, "Canadian Renewable Energy Pros-pects," Solar Energy, Vol. 23, 1979, pp. 459-700; Chris Wood, "Canada's Fuelwood: Outof the Bush and Onto the Grate," Wood 'n

Energy, January 1981; Brian Toiler, "Ot-tawa's FIRE Program Expanded, BudgetNear Tripled to 8288 Million." and "ENFORResearch Moving Beyond Inventory Phase,"Canadian Renewable Energy News, April 1981.

18. DOE, Estimates of Wood Energy Consump-tion.

19. Boor. Allen & Hamilton, Inc., "Assess-ment of Proposed Federal Tax Credits forResidential Wood Burning Equipment," Be-thesda, Md., August 1979; Housing IndustryDynamics, Crofton, Md., private communica-tion, August 8, 1983.

20. Based on 17.2 million Btus per dry tonof wood and 5.8 million Btus per barrel offuel oil; assumes oil heating is 65 percentefficient and wood heating is 45 percent effi-cient. DOE, Estimates of Wood Energy Consump-

tion.

21. Data on wood consumption are fromDOE, Estimates of Wood Energy Consumption;data on oil use are from DOE, State EnergyData Report 1960 through 1981 (Washington,D.C.: U.S. Government Printing Office,1983); Mark R. Bailey and Paul R. Wheeling,Wood and Energy in Vermont (Washington,D.C.: U.S. Department of Agriculture, Eco-nomic Research Service, 1983).

22. Alberto Goetzl and Susan Tatum,"Wood Energy Use in the Lumber and WoodProducts Industry," Forest Products Journal.March 1983. and private communication,September 1, 1983; Valerie Dow, "WoodElectrics--For U.S. Utilities, It's Wait andSee," Canadian Renewable Energy News, April1981; Swedish and Canadian data are from

246

Notes

Patricia Adams, "Wood Energy. RekindlingAn Old Flame." Energy Probe, Toronto,Canada, March 1981.

23. R. Davidson, Employee Services Man-ager, Proctor and Gamble, Staten island.N.Y.. private communication. September 8,1983; Phillip G. Sworden, Supervisor, Natu-ral Resources Department, Dow CorningCorporation, Midland, Mich., private com-munication, August 19, 1983.

24. Bonneville Power Administration, Bio-Energy Bulletin (Portland, Ore.), December1982; Tim Cronin, Director of Public 'ffairs,Burlington Electric Department, Burlington,Vi., private communication, August 19,1983; Robert P. kennel, Vice President fornevelopment, Ultras) stems, Inc., Arlington,Va., private communication, September 7,1983.

25. Ernesto Terrado, Biomass Speciali.L.14 orld Rani. Washington, DC, private com-munication, August 17, 1983; Frank H. Den-ton. Coosultain. "The Twentieth CenturyRevolution? Energy from Tree Farms," Phil-ippine National Electrification Administra-tion. Manila, unpublished, 1982; Ministry ofEnergy, "Ten-Year Energy Program 1980-1989," Manila, Philippines. 1980.

26. Jourdan Houston. "Pelletized Fuels:The Emerging Industry," Wood n' Energy.January 1981; John I. Zerbe, "The ManyForms of Wood as Fuel," American Forests.Octoher 1978.

27. U.S. Office of Technology Assess-ment, Wood Cse: ('.S Competitiveness and Tech-nology (Washington, D.C.: U.S. GovernmentPrinting Office, 1983); Colin High. "New En-gland Returns to Wood," Xatural Histoty,February 1980; Sworden, private communication; U.S. Office of Technology Assess-mew, Energy From Biological Processt, rd. , ",Technwal and Environmental Analyses 'Washington, D.C.: U.S. Government Printing Office,1980).

28. Eugene Carlson, "Smoke From WoodBecomes Big Polluter in Northern U,S.,"

(231)

Wall Street Journal, October 4, 1983:, CharlesF.. Hewett and Williani T. Glidden,Jr., MarketPressures to ('se Wood as an Energy Source: Current

Trends and a Financia! Assessment (Hanover,N.H.: Resource Policy Center, DartmouthCollege, 1982); Canadian Renewable EnergyNews, December 1980; Office of TechnologAssessment, Wood ('se; Sworden, privatecommunication.

29. Average thermal gradient is from Don-ald White, "Characteristics of GeothermalResources," in Paul Kruger and Card Otte,eds., Geothermal Energy (Stanford, Calif.: Stan-ford University Press, 1973); maximum tem-perature gradient is from Vase! Roberts,Electric Power Research Institute, Palo Alto,Calif., private communication. April 26,1982; the world's geothermal zones are de-scribed in Erika Laszlo, "Geothe. mai Energy:An Old Ally." /link), Vol. X, No. 5, 1981.

30. Estimate of current geothermal energyuse is derived from Ronald DiPippo, "Geo-thermal Power Plants: Worldwide Survey ofJuly 1981," presented to the Geothermal Re-sources Council Fifth Annual Meeting. Hous-ton, Tx., October 25-29. 1981, and RonaldDiPippo, Southeastern Massachusetts Uni-versity, private communication, September1983; "Report of the Technical Panel onGeothermal Energy," prepared for theUnited Nations Conference on New and Re-newable Sort Ts of Energy. Nairobi, Kenya,August 10-21. 1981; Jon Steinar Gudmunds-son, Department of Petroleum Engineering,Stanford University, private communication.November 24,, 1981; William W. Eaton, Geo-thermal Energy (Washington, D.C.: U.S. En-ergy Research and Development Administra-tion, 1975).

31. Paul J. Leinau and John W. Lund,"Utilization and Economics of GeothermalS. c) eating in Klamath Falls. Oregon."(kip H it Utilization Center., Oregon Insti-

.^ 1 feehnology. Klamath Falls, Ore-, un-p....iished, fated; the life-cycle cost analy-sis is from John W. Lund. "GeothermalEnergy UGlization for the Homeowner,"

24 7

(232) Notes

Gets-Heat Utilization Center. Oregon Insti-tute of Technology. Klamath Falls. Ore., un-published. December 1978.

32. "Basic Statistics of Iceland." Ministryof Foreign ANairs, Iceland, April 1981; JonSteinar Gudmundsson and iludmondur Pal-mason. "World Survey of Low-TemperatureGeothermal Energy Utilization," preparedfor the United Nations Conference on Newand Renewable Sources of Energy. Nairobi.Kenya, August 10- 21,198 .; comparison withoil costs is from "Hilaveita Reykjaviktir " agovernment pamphlet desershing Iceland'sdistrict heat programs. Reykjavik. Iceland.undated.

33. Description of baths in Japan is fromJohn W. Lund, "Direct Utilizationthe In-ternational Scene." Geo-Heat UtilizationCenter. Oregon Institute of Technology.Klamath Falls, Ore.. unpublished. undated;estimates of energy saved by Japanese bathsand geothermal applications in Thailand andMexico is front Gudmundsson and Palmason."World Survey"; information on geothermaluse in Guatemala is from Kathleen Courrier,Center for Renewable Resources. Washing-ton, D.C., private communication. March1983; greenhouse applications are describedin Lund, "Direct Utilization," and in Cud-Inundsson and Palmason, "World Survey."

34. Industrial uses in Iceland and NewZealand are described in Paul J. Lineal."Geothermal Resource Utilization," preseated to American Association for the Ad-vancement of Science Annual Meeting,Washington. D.C.. January 3-8. 1980 theonion dehydration project is described in JoeGlorioso. "Geothermal Moves Off the BackBurner: Part II." Energy Management. Oc-tober/November 1980.

35. For a thorough discussion of :he diff-erent electricity-generating technologies andoperating experience to dam, see RonaldDiPippo, Geothermal Energy as a Source of Eke-

tnnty {Washington. D.C.: U.S. Department ofEnei -qr. 1980); information about The Gey-sers is from the Pacific Gas & Electric Com-

248

parry. "The Ge .- Power Plant Develop-ment." San Francisco. unpublished, March26.1982, and private communications, Octo-ber 1983.

36. DiPippo. Geothermal Energy as n Source ofElettnoty.

37. Information on the prospects for dou-ble flash plants is from David Anderson. Geo-thermal Resources Council. Davis, Calif.. pri-vate communication, June 18. 1982; thebinary plant design is discussed in DiPippo.Geothermal Energy as a Source of Electricity, andin U.S. General Accounting Office. Elimina-tion of Federal Funds for the Ileber Project WillImpede Full Development and Cm of HydrothermalResources {Washington. D.C.: 1982).

38. Hydrogen sulfide emissions and con-trol information are described in DiPippo.Geothermal Energy as a Source of Eltancity, andin J. Laszlo, "Application of the StretfordProcess for HiS Abatement at The Geysers."Pacific Gas & Electric Company. San Fran-cisco. unpublished. 1976; contamination ofsurface water supplies is discussed in Di-Pippo. Geothermal Energy as a Source of Eltanc-rty

39. For an example of a national resourceassessment. see L.J. P. Muffler, Assessment ofGeothermal Resources of the Crafted StatesI9i8(Washington, D.C.: U.S. Geological Survey.,1979).

40. The legal status of geothermal energyis discussed in "Report of the TechnicalPanel on Geothermal Energy." Nairobi Con-ference. and in Kenneth A. Wonstolen,"Geothermal Energy: Basic Legal Parame-ters," presented to the Geothermal Re-sources Council Fourth Annual Meeting. SaltLake City, Utah. September 8-11, 1980,

41. A description of the French program isfound in Ministere de l'Industrie du Com-merce et de l'Artisanat, La Gtothermit en France(Paris: 1978); the U.S. program is describedin DOE. Division of Geothermal Energy."Federal CostSharing for Exploration ofHydrothermal Reservoirs for Direct Appli

Notes (233)

cations," Washington. D.C.. unpublished,1980; information on Iceland's program isfrom Gudmundsson, pris ate communication.April 25. 1982.

42, The rate of growth of geothermal gen-erating capacity since the mid-seventies isderived from Vasel Roberts, "GeothermalEnergy." in Advances in Energy Systems andTechnology, Vol. 1. 1978, from DiPippo."Geothermal Power Plants." and fromDiPippo, private communication; projectionsof future use are based on "Report of theTechnical Panel on Geothermal Energy,"Nairobi Conferent and on Roberts, "Geo-thermal Energy,"

43. France's resource potential and utili.zation goals are from "France and geother-mal power ---a source with enormous poten-tial." Christian Science Monitor, October 1.1980; potentials in Canada, China, and theSoviet Union are from Gudmundsson. pn-cate communication, November 24, 1981:number of hot spots in China is from"China's Growing Geothermal Use," Energyin Countries with Planned !framing". November2, 1979.

44. John W. Shatpe, "Energy Self-Suffi-ciency for Hawaii," Seienee. June II, 1982.

45. National plans are from DiPippo,"Geothermal Power Plants." and DiPipPo,private communication: Mexico's plans aredcscrihed in "Report of the Technical Panelon Geothermal Energy." Nairobi Confer-ence: El Salvador figure is from DiPippo. Geo-thermal Energy as a Source of Eleetnaly

46. Worldwatch Institute estimate basedon shipments of 18,000 kilowatts of cells at asystem cost of approximately 115.000 perkilowatt. For a more detailed discussion ofrecent developments in photovoltaics. seeChristopher Flavin, Electricity from Sunlight.The Future of Photovoltaies (Washington. D.C.:Worldwatch Institute. December 1982).

47. Paul Maycock, Photovoltaic EnergySystems Inc., Alexandria. Va., private com-munication. November 9. 1983.

48. Robert R. Ferber, U.S. Jet Pre. pulsionLaboratory. Pasadena. Calif.. private com-munication. November 11, 1982. and RobertJohnson. Strategies Unlimited, MountainView. Calif.. private communication, Novem-her 12. 1982,

49. Historical figures are based on Strate-gies Unlimited. 1980-81 Market Review

(Mountain View, Calif.: 1981); the 1983figure is from Maycock, private communica-tion,

50 Strategies Unlimited, 1980-81 MarketReview, the 1983 estimate is from Maycock,private. communication.

51. Efforts to reduce the cost of photovol-talcs are discussed in Flavin. Electricity fromSunlight.

52. These figures are Flavin 's estimatesbased on private communications with vari-ous industry analysts.

53. Steven J. Strong. "Pioneering PVHomes: A Trickle Down or Trickle Up Mar-ket?," Photovoltaics The Solar Mean(' Magazine,June/July 1982; "Residential Retrofits OfferEnormous Existing Market. New Study De-monstrates," Photovoltaic Insider's Report (Dal-las. Tex.). May 1982.

54. "Major Solar Projects Round theWorld." World Solar Markers. December 1981"Fre.nel Lens PV Systems Starting Up atSaudi Villages. Phoenix Airport." Solar En-ergy hilelligenee Report. April 5, 1982.

55. Descriptions of various projects arefrom their developers. private conimunica-lions. September 1983.

56. "Japan Earmarks Cash for PV Ven-tures." World Solar Markets, February 1983.,-Japanese PV Plant Comes on Line." WorldSolar Markets. January 1983.

57. "Major Solar Projects." World SolarMarkets; updates from various trade press re-ports. 1983.

58. Calestous Juma. "Photovoltaics andthe Third World: 'reclino-Econotnic Expec-

24 9

(2)4) Notts

cations and Po in v Responses," Science Pol-icy Research Unit. University of Sussex,Brighton. England. unpublished, July 1983,

59. Charles Thurston, "HeliodinatricaPuts Brazil on Road to Photovoltaic Technol-ogy." Beitewable Energy News. March 198.,."Pakistan Gets First of 14 PV Generators."World Solar Markets. October 1981.

60. Officials of Spire Corporation. Bed-ford. Mass., and Chronar Corporation,Princeton. NJ.. private communications.1983.

61. Description of the French effort isfrom Emile Gouriou. Bureau Yves Houssin,Par::,. private communication, September 3,1981: information on the U.S. effort is froinLouis Rosenhium, Consultant. Ohio, privatecommunication. November 4, 1083.

62. Bill D'Aiessandro. "Villagers Light theWay: Solar Cell Power in Gunsight. Ari-zona," Solar Age, May 1979, "Ambitious 30KW/P PV System to be Completed in Tuni-sian Village." Photovoltaic Insider's Report (Dal,las, Tex.). Septetnber 1982.

63. These figures are Worldwatch Insti-tute estimates: for further details see Flavin,Eltantity front Sunlight

64. Daniel Deudney and Christopher Fla-vin. Renewable Energy: The Power to Choose (New'fork: W. W. Norton & Co.. 1983).

Chapter 9. Reconsidering the Automo-bile's Future

1. Robert U. Ayres. for Oak Ridge Na-tional Laboratory. Worldwide Transporta-tton/Energy Demand Forecast: 1973-2000(Springfield. Va: National Technical Infor-mation Service,, 1978).

2. Motor Vehicle Manufacturers Associa-tion (MVMA), Mo:or Vehicle Facts and Figures'83 (Detroit. Mirh.: 1983).

3, Worldwatch Institute estimates of auto-mobile production are based on data from

MVMA. World Motor Vehicle Data Book, 1982Edition (Detroit. Mich.: 1932).

4. 51VMA, World Motor Vehicle Data Book

5. Ih:d.

6. Ibid.; 1983 estintate by Worldwatch In-stitute.

7. U.S. Department of Transportation(DOT), The U.S. Automobile ,ndiutry. 1981(Washington, D.C.: U S. Government Prin-ting Office, 1982).

8. MVMA, World Motor Vehicle Data Book

9. "South Korea: A radical redesign of theauto industry.' Busineu Week. October 13.1980.

10. See, for example, Richard R. Leger,"Oil -Price Surge Clobbers Less-DevelopedNations Such as Kenya and Cuts Their LivingStandards." Wall Street Journal. M'y 30,1979,and DOT, The t' S Automobile Industry, 1980(Washington, D.C.: 1981).

11. U S. Department of Commerce., TheU S Automobile Industry. 1982 (Washington.D.C.: 1983).

12. DOT. The U.S. Automobile industry,1980

13. DOT, The U.S. Automobile Industry,1980 and The U.S. Automobile Industry, 1981.

14. DOT, The t'.S. Automobile Industry.1980. Julius J. Harwood, "AutomakersLighten the Load." Technology Review, July1981; U.S. Department of Commerce. Thet' S. Automobile Industry, 1982.

15. Mark Potts and Warren Brown. "AutoReduction Hits Suppliers." Washington Post,January 9. 1983.

16. DOT, The U.S. Automobile Industry.1981.

17. Federal Highway Administration,Highway Statutes (Washington, D.C.: annual).

18. Federal Highway Administration,Highway Statistics; MVMA. Motor Vehicle Factsand Figures '83.

1 !4 01.1

Soles (235)

19. The Wade weight used here"titerteal weis;!4"includes the weight of a driverand reel for road testing purposes. Philip Pat.tenon, Conservation Program, U.S. Depart-ment of Energy. private communication, October 12, 1983.

20. MVMA, Motor Vehicle Pads anef Figures,Tony Grey, "U.S. two.seater cars may weighas little as 1,200 pounds and get 80 miles pagallon." Christian Screw Morisco, October 15,1980.

21. DOT, The (*.S. dittomobilt &chatty,1980

22, John M. Geddes, "German Car MakersSet Fuel Cut," New Fort Tones, May 1, 1979:Roger Gale. "Japan Gets New ConservationLaw," The Energy Daily, September 27, 1979;Richard J. Moshe), "Mexico Set to RevampTroubled Auto Industry," New l'ork Times,Septembm. 15, 1983.

23. Sherwood L. Fawcett, "The 100M.P.G. Car," New York Times, November 22,1981; Repr "sentative Bob Sham an sky, "To

Join the Car Race," New York Times, February2, 1982.

24, "France Launches Thrifty Car." Finan-cial Times European Energy Report, tune 26,1981; Rushworth M, Kidder. "Will new,83 m.p.g, car save Britain's king of theroad?," Christian Selena Monitor, September16, 1980,

25. "The tiny cars that women are wildabout," Business Week, February 28. 1983.

26. Emil Parente, Fluor Corporation, Ana-heim, Calif., private communication, August17, 1983.

27. Leonard Lehr. "Canadian SyntheticFuel Project Provides Instructive, and Sober-ing Lesson for U.S.," Wall Street journal, De.cember 11, 1979,

28, "Slow growth seen for syntheticfuels," Or andGas Journal, May 2.1983; "Syn-thetic fuels bubble set to burst," New Snorer,December 16, 1982.

29. James Bruce, "Brazil's Alcohol ExportProspects Shrink But Domestic Mart Conlin.ues Growth," journal of Commerce, April 5,1983.

30. 1983 estimate by Worldwatch Insti-tute, based on data from Janet Limey, Economic Research Service, U.S. Department ofAgriculiirse, private communication, August;5, 1983.

31. Organisation for Economic Co-opera-tion and Development, !nterfutures (Paris:1979); David Bayliss, Transportation and De-velopment Department, Greater LondonCouncil, England, private cc mmunication,September 7, 1983.

32. Fora discussion of the assumptions onwhich automobile demand projections arebased, see David Bayliss, "Global Car Own.ership in 1990 and 2000 A.D.," presented atthe International Policy Forum, liakone,Japan, May 16-20, 1982 (reprinted by theFuture of the Automobile Program, Massa.chusetts Institute of Technolori, Cam-bridge, Mass.).

33. Peng Feifei, Second Secretary, Em-bassy of the People's Republic of China, pri-vate communication, November 9, 1983.

34. Eliot Janewa), "The Prince of Pessi-mism says the system could topple," Washing-

ton Post, August 14, 1983

35. William A. Ormejr., "Mexico Plans toIncrease Domestic Fuel Prices," journal ofCommerce, October 27, 1983: information onBrazil is from J, C. Barros, Petrobras, NewYork, N.Y., private communication, October3, 1983.

36. "Yugoslavia Begins Gasoline Ration.ing to Counter Shortage." Watt Street Journal,

October 11 1982; "Poles Facing FurtherCuts In Gasoline," journal of Commerce, Sep-tember 30, 1983,

37, Tom Kennedy, "With so little nativefuel, Danes stress conservation," ChristianScience Monitor, October 6, 1979; MVMA,Weald Motor Vehicle Data Book

251

(236) Notes

38. MVMA. World Motor Vehicle DataBook.

39. Ibid.

40. Ibid.

41. Dennis R. Gordon, "The Andean AutoProgram and Peruvian Development: A Pre-liminary Assessment," Journal of DevelopingAreas, January 1982.

42. Leger. "Oil-Price Surge ClobbersLessDeveloped Nations"; "IMF Study Advo-cates Higher Gasoline Taxes," New YorkTimes, February 24, 1980.

Chapter 10. Securing Food Supplies

1. Food production data in this chapterare drawn primarily from US. Departmentof Agriculture (USDA), Economic ResearchService (ERS). World Indices of Agricultural andFood Production. 1950-82 (unpublishedprintout) (Washington, D.C., 1983), andfrom USDA. Foreign Agricultural Service(FAS). Foreign Agriculture Circulars, variouscommodities. Washington, D.C., publishedmonthly,

2. See, for exami..ie, Jay Ross. "Africa: ThePolitics of Hunger" (series). Washington Post,June 25-30, 1983.

3. Davidson R. Cwatkin. Signs of Change inDeveloping-Comity Mortality Trends: The End ofan Era, Development Paper No. 30 (Wash-ington, D.C.: Overseas Development Coun-cil, February 1981),

4. USDA, ERS, World Indices.

5. United Nations Food and AgricultureOrganization (FAO), Production Yearbook

(Rome: annual, various years).

6. Kenneth B. Young and Jerry M.Coomer, Effects of .Vatural Gas Price Increases onTexas High Plains Irrigation, 1976-2025. Agri-cultural Report. No. 448 (Washington, D,C,:USDA, Economics, Statistics, and Coopera-tives Service, 1980).

7. Marshall I. Goldman, The Spoils of Prog-ress (Cambridge, Mass: M.I.T. Press. 1972);Dr. John Gribben, "Climatic Impact of SovietRiver Diversions," New Scientist. December 6,1979; Grigorii Voropaev and Aleksei Kosa-re "The Fall and Rise of the Caspian Sea,"New Scientist, April 8, 1982.

8. Arizona Water Commission, Inventory ofResource and (..'ses (Phoenix, Ariz.: 1975).

9. Republic of South Africa, Report of theScience Committee of the President's Council onDemographic Trends in South Africa (Capetown:The Government Printer, 1983).

10. FAO. FAO 1977 Annual Fertilizer Review(Rome; 1978): Paul Andrilenas, USDA, ERS,private communication. December 9, 1982.

11. USDA, Agricultural Statistics 1982(Washington. D.C. . U.S. Government Prin-ting Office. 1982).

12. USDA. ERS, "Fertilizer Outlook andSituation," Washington, D.C., December1982.

13. USDA, Soil and Water Resources Conser-vation Act ( RCA), Summary of Appraisal. Parts Iand 1I and Program Report Review Draft 1980(Washington, D,C.: 1980).

14. Economic Report of the Prudent (Wash-ington. D.C.: U.S. Government PrintingOffice, 1983).

15, Ibid.

16. Lester R. Brown, Man, Land and Food:Looking Ahead at World Food Needs, Foreign Ag-riculture Economic Report No. 11 (Washing-ton. D.C.: USDA, ERS, 1963).

17. USDA, FAS, "Reference Tables onWheat, Corn and Total Coarse Grains Sup-ply Distribution for Individual Countries,"Foreign Agriculture Circular FG- 19 -83. Wash-ington, D.C., July 1983.

18. Figures on cropland idled iii theUnited States are from Randy .Jeber, USDA,Agricultural Stabilization and ConservationService, private communication, August 23,1983,

252

Notes

19. For a discussion ol manipulation ofgrain exports for political purposes. see DanMorgan. Merchants of Gram (New York: Pen-guin Books. 1980).

20. Weber. private communication. Thegrain equivalent of idled cropland is cal-culated assuming a marginal grain yield of3.1 metric tons per hectare.

21. For a discussion of the demographicconsequences of famine in China, see H.Yuan Tien. "China: Demographic Bil-lionaire," Population Bu Ikon (Washington.D.C.: Population Reference Bureau. 1983);U.S. food aid shipments to India are unpub-lished data on P.L. 480 from Dewain Rahe,USDA. FAS, private communication. August31.1983.

22. Michael deCourcy Hinds. "U.S. Giv-ing Peru and Bolivia Millions in Food Aid.".Yew YorA Times, June 2, l983; FAO andWorld Food Programme Special Task Force."Exceptional international Assistance Required in Food Supplies. Agriculture and An-imal Husbandry for African Countries in1983/84." Rome. September 30. 1983.

23. Amartya Sen. "How is India Doing ?."Ken. ForA Review of Books. December 16.1982.

24. Dr. Colin McCord. "The Com-paniganj Project." presented s the annualmeeting of the American Public Health Asso-ciation. Miami Beach. Florida, October 17-2 4 1976.

25. USDA, ERS. Latin Amenca World Agri-culture Regional Supplement Review of 1982 andOutlook for 1983 (Washington. D.C.: 1983).

26. U.S. food aid shipments under P.1..480 are from Rahe. private communication;International Monetary Fund. Washington.D.C.. press release. May 21. 1981.

27. Mac Margolis. "Brazil 'dust bowl' 5times size of Italy," Christian Science Mannar.August 26, 1983.

28. USDA. ERS. World Indices.

(237)

Chapter 11. Reshaping Economic Poli-cies

1. Data Resources Incorporated projec-tion cited by Roberti. Samuelson. "Convivi-alit) Mocked Global Debt Realities." Il'ash-ington Post, October 4. 1983.

2. Fora description t.f Norway's system ofnatural resource accounting. see Per ArildGarnasjordet and Petter Longva. Outline of aSplem of Resource Accounts. The Norioegian Expe

rience (Paris: Organisation for Economic Co-operation and Development. 1980). and Pet-ter Longva, A System of Maw( ResourceAccounts (Oslo: Central Bureau of Statistics,1981); for a comparison of several countries'experiences with resource accounting. seeTony Friend, "Review of International Expe-rience in Natural Resource Accounting."presented to the United Nations Environment Programme (UNEP). Ad Hoc. ExpertConsultative Meeting or. Environmental Ac-counting and Its Use in Development Plan-ning. Geneva. February 23-25. 1983 (re-ferred to in following notes as UNEP Ad HocExpert Meeting).

3. Edward Weiller. "The Use of Environ-mental Accounting for Development Plan-ning. presented Jo UNEP Ad Hoc ExpertMeeting.

4. Japan's emphasis on pollution andother environmental consequences of indus-trialization is evident in Government ofJapan. Environment Agency. Quality of the En-

vironment in japan 1982 (Tokyo: 1983).

5. Results of the 1977 inventory are pub-lisherg in U.S. Department of Agriculture(USDA). Soil Conservation Service, and IowaState University Statistical Laboratory. Baste

Statistics 1977 National Resources inventory. Sta-tistical Bulletin No. 686 (Washington, D.C.:1982). Analysis of the 1982 National Re-sources Inventory, conducted by the SoilConservation Service and the Iowa State Uni-versity Statistical Laboratory. should beavailable in 1984.

253

(238) Notes

6. Kenneth Moulding. quoted in NationalAcademy of Sciences.-Energy Chown in a Demo-cratic Society (Washington, D.C.: 1980).

7. "Critical Moment in Bangladesh." Peo-ple (London), Vol. 7., No. 4, 1980.

8. The KV is discussed in Overseas De.velopment Council. The United States andWorld Development 1977 Agenda (New York;Praeger Publishers. 1977).

9. The development of small hydropowerin China is discussed in Robert P. Taylor.Rural Energy Development in China (Wash-ington. D.C.: Resources for the Future.1981).

10. For an overview of the prospects forimproving irrigation efficiency. see MarkSvendsen, Douglas Merry, and Wonh Fitz-weld. "Meeting the Challenge for Better Ir-rigation Management," Horizons (Journal ofthe D.S. Agency for International Develop-ment). March 1983.

11. "Each additional million liters of alco-hol distilled creates 45 new jobs." JamesBruce, "Brazil's Alcohol Project Flourish-ing." journal of Commerce. June I, 1983.

12. For an introduction to anaerobic di-gestion technologies. see Andrew Barnett.Leo Pyle, and S. K. Subramanian. Brogan Tech-nology in the Third World: A Attiltiduciphriary Re-view (Ottawa: International DevelopmentResearch Center, 1978).

13. For efforts to develop appropriate andefficient stove designs. see Bina Aprwal, TheWood Fuel Problem and the Dijrusion of Rural In-novations (preliminary draft) (Brighton. En-gland: Science Policy Research Unit. Univer-sity of Sussex. October 1980),

14. See Sigurd Grava, "Locally GeneratedTransport Modes of the Developing World."in National Academy of Sciences. Transpor-tation Research Board, L'reon Transportation&mows (Washington. D.C.; 1978).

15. Y. Morooka, R. W. Herdt, and L. D.Haws. An Analysis of the Labor-Intensive Continu-ous Rice Production System at 1R RI. Intern-

tional Rice Research Institute ResearchPaper Series No. 29 (Manila: May 1979).

16. John P. McInerney et al.. "The Conse-quences of Farm Tractors in Pakistan,"World Bank, Washington, D.C.. 1975.

17. Lewis M. Simons, "Social, Economicinequities Fuel Philippine Insurgency,"Washington Post. September 17, 1977.

18. Michael Lipton, "Urban Bias: Or WhyRural People Stay Poor." People (London).Vol. 3. No. 2, 1976.

19. David Welsh, Professor of South Afri-can Studies. University of Capetown, quotedin Mike Nicol. "Overpopulation ThreatensSouth African Lifestyle." World EnvironmentReport, April 30, 1983; Republic of SouthAfrica, Report of the Science Committee of the Presi-

dent's Council on Demographic Trends m SouthAfrica (Capetown: The Government Printer.1983).

20. Charles William Maynes. "If the PoorCountries Go Under, Well Sink WithThem." Washington Post, September 18, 1983.

21. Ruth Leger Sivard, World Military andSocial Expenditures 1983 (Washington. D,C.:World Priorities. 1983).

22. Inga Thorsson, "Guns and butter: Canthe world have both ?," ' dernational LabourReview, july/August 1983.

23. Military shares of GNP are from Si-yard, World Military and Sonal Expenditures.The effects of military spending on the Sovieteconomy are reviewed in Gregory G. Hilde-brandt, "The Dynamic Burden of Soviet De-fense Spending." in joint Economic Commit-tee, U.S. Congress. Soviet Economy in the1980's: Problems and Prospects (Washington.D.C.: U.S. Government Printing Office,1983).

24. Marshall Goldman. "Let's ExploitMoscow's Weakness," New York Times, April4. 1982.

25. For a review of U.S.-Soviet food trade,see Lester R. Brown, U,S. and Soviet Agricui-

254

Notes

lure: The Shifting Balance of Power (Washing-ton. D.C.: Worldwatch Institute, October1982).

26. Robert Lekachman, "Remedies Avail-able. Good Sense Lacking,- Challenge. March/April 1983.

27. Thorsson. "Guns and butter.-

28. Growth in military expenditures is cal-culated from data in Stockholm InternationalPeace Research Institute, World Armaments andDisarmament, S1PR1 Yearbook 1983 (New York:Taylor & Francis. Inc.. 1983); economicgrowth rate is derived from Herbert R. Block,The Planetary Product m 1980: 4 Creative Pause?(Washington, D.C.: U.S. Department of State,1981). and World watch Institute estimates,

29. Sivard. World Althtary and Social Expen-ditures,

80. Ibid.

31. For Jean Monners role in designingthe European Community, see Mary and

(239)

Serge Bromberger, Jean Monne, and the CnotedStates of Europe (New York: Coward-McCann.Inc., 1969).

32. Edward Schumacher, "ArgentineLeader's First Crisis Will Be Cash," New ForkTunes, November 6, 1988.

33. Gunter Grass. is a New BarbarismOvertaking Our World?," Washington StartJuly 13. 1975.

34. Soedjalmoko. "Political Systems andDevelopment in the Third World: New Di-rections for Social Science Research in Asia,"Nirrnailves, Spring 1988.

35, Needed growth in population expen-ditures is from Dana Lewison, "Sources ofPopulation and Family Planning Assistance."Population Reports (Baltimore, Md.). January/February 1983: the comparison with globalmilitary expenditures is based on data fromStockholm International Peace Research In-stitute, S1PR1 Yearbook 1983,

255

Index

acacia tree. 88.93Acadeins of Agricultural Sciences (Soviet Union). 59acid ram. X111. 10. 14. 74. 79- 82.98. 196Addis Ababa (Ethiopia). kerosene price in. 41AEG elefunken, phounciltale demonstration projects.

152Africa

oricithiii41 output of, 5. 191-92assessment of fisture. 27deforestation in. 75-6desertification in. 10drought of 1983 tn. 175economic decline in, 29fallowing to restore sod in. 56famine relief from UMW' Stales for, 188food production fallen in. 24. 175(nod shortages acute Mb 75. 189, 192(melts ood price increases in, 83gram production in. 192Income decline in, 190lisestock herds dwindling in, 16monalits rate in, 73population explosion and laud in. 5. 27. 30, 192Sahel region. 8$sod acidification in. 197soil erosion in, 5, 72-73solar energy tit, 153staid ccccc hies in. 178

Agency for International Deielopmcm (AID), 65. 153agriculture. underinsestment in. 178, 192Agocuhure. 11.5 Department of (USDA). xv. 30, 53.

63. 177. 181. 184agroforestn. 88air pollution

and automobile's future. 169. 172coal cause of. 135central strategies, 80. 196forests deoroyed by, 14, 74

alcohol as automatise fuel in Brazil, xvi. 4. I5. 38, 46.167 - 68.200

Algeria. 50. 184Alfonsin. Pesodentelect Raul. 208Ali amont Pass (California), wind machine noise. 140aluminum

budding world markets for, 114cost saving by use, 105iniernatoimal trade II.. 105. 113location of factories, 13production versus recycling eon. mu, 4. 13.90,

95-6, 105.419recoserv.115. 104-09. 112, 113-14

Amazon basin. 13. 56.92Amboklao Dam (Philippines). 65, 84American Farmland 'Trust. 68American Paper Institute, 103American Society of Agronomy. 73Anatolian plater. of Turkey, alternate year cropping

in. 55Anchicay a Dam (Colombia). 66

256

Andean countries. 5. 54Andropov, Yuri, 205architecture. climatesensinve, 198ARCO Solar, Inc.. 152Argentina

Iamb rate decline in. 26fertilizer use in. 179foreign (lebt interest in, 16. 194gasoline tax in. 38. 44grain surplus in. 184. 186Iron and steel recycling in. 110military expenditures reduced in. 205nuclear power in. 130-31

Arizona, 119. 154. 177arms imports. to Thud World, we military

expendituresArmy Corps of Engineers. 67Asia

fertilizer in, I8Cforested land clearing in. 76-77fuelwood scarcities in, 83soil loss in. 57-62tropical forests in. 8485

Athabasca River Basin. tar sand production. 166Atomic Energy Commission (U.S.). 116Atomic Industrial Forum (U.S.). 125Atommash. Soviet nuclear reactor production facility.

128-29Atoms For Peace program, 117Australia

alternate year (Topping In. 55aluminum production in, 104-05desertification in. 10grain surplus in, IN. 186income disinbution ratio in, 202nuclear pow,. in 1983 in. 118solar cell industry in, 150lax incentives for conversion from oil tn. 46

AustriaGerman waste exchange used in. 101scrap export limos in, 114

automobile. 157-74aluminum in. 104dealers. 12and driving habits in U.S.. 39engines, 142and fuel efficiency. 38-39. 16244government taxes discourage ownership of. 161industry in United States, 12. 139. 157. 159Japanese produced, see Japan. automobile inoil conservation and. 12. 3549oil prices and. 15940production of. 8. 159-66,recycling of. 112site of. 144

automobile supply Industries. effect of higher oilprices. 8

Athomouve Fuel Efficieney Ad (U.S.). 163

B ali (Indonesia). 26.77Baltic Sea, soil erosion in region of. 60bamboo, shortages of. 83-84Bangkok. traffic congestion in. InBangladesh

contrast with China, 31. 169deforestation of Himalayan hills, 84family planning in. 32. 3 3. 191famine deaths M. 191fuelwood price increases in, 83income distribution ratio in. 202land reform in. 191populadow_growth in. 21, 30poverty definition. 197

Barbados, birth rates in. 24basic needs development strategy.

nutrition/literacy/health care. 204basic social indicators, focus on life expectancy. 198Sande Memorial Institute. 164bauxite. aluminum production from. 105Bayliss, David. 168-69beef. 10. 30, 77-78Beiser institute in Sweden. tropical Africa stove

design. 89Belgium

econont'^ growth on. 28as food importer, 184gasoline tax high on, 44won and steel recycling in. 109nuclear industry on. 128solar cell industry in, 150wind machine from. I, 139

bensopyrene, from iron ore production. 96Bersrand, Anson R.. 53beverage container deposits, 112 we also container

deposit legislationbiocles, 13, 203. 208biological support systems, 2-3. 14-16. 29biological thresholds, and population growth. 20bioniasa. conversion to methane, 134. 154, 200B ioSolar Research and Development, wood pellet

producer. 144biotechnology, growth industry, 8.208birth and death rates, 197, 207birth rate reduction. to family planningB 1, Ltd., new car. 165Bombay (India). fuelwood price increases. 83Borovaky, Dr. Vladimir. 59Nude hill, Iff container deposit legislationBoulding. Kenneth. 197Brasil

alcohol fuel, 4, 13. 38. 42.46. 160, 167.68.200alternative energy sources on. 13aluminum in. IS, 104Aniaroman basin investment by. ISautomobile use in. 170-71automobile industry in. 160cattle raising in. 78and chemical industry switch from petroleum, 46economic future of. 194expon earnings and foreign tiebi 'merest on, 16.

191-92, 1food crises in. 192

frasdpi;irc°deproduction

gasoline rationing. 51income distribution ratios in, 202iron and steel in, 110. 113nuclear power in. 131oil consumption decline, 38, 49population growth on, 21, 192. 194sod acidification in. 82solar cell industry in. 150. 153wood converted to charcoal for sleet industry in. 77

Breshnev. President Leonid. 205B ritain. ire United KingdomB rower. David. 103

Index (241)

B ulgarianuclear industry in. 128population staboliration possible. 23

B urlington (Vg. power plant in. 143-44B urma population growth. contrast to Japan. 21

Californiageothermal energy tn. 147national nuclear waste disposal program. 132solar-electricity in. 152wind farms. xvi, 4, 137-40wood burning utilities. 141-43

California Department of Water Resources,geothermal energy user, 147

Californic Energy Commission. I. 138Camels Hump. acid rain research. 79.81 -82Cameroon, fuelwood price increases. 83Canada

acid rain's effect in, 79, 81aluminum production and recycling in. 13. 104. 105Amason Basin investment by, 13automobile fuel efficiency standards, 39birth rates, 24container deposit laws, 108federal grants for insulation. 46geothermal heat in future. 148grain surplus In, 183-84. 186homeowners/business grants for conversion from

oil in, 40.47income distribution ratio in, 202national energy program in. 46nuclear power in. 116-17. 122oil price in. 46Paper companies in. 102. 142solar cell industry in. 150tar sands in. 44. 166waste paper user. 101-02wheat in, 182wind machines erected in. 137wood energy in, 141, 142

Canadian Wheat Board. exports banned. 184CANDU, nuclear plants. 122car pools. 39cars, to automobilesCarter. President Jimmy, 30.44, 103. 185Caspian Sea, diversion of water for irrigation, 177cassava, on atoping land. 54catalytic converters, for control of wood pollutants.

cante145.ratsing, export money for. 77Central America

agroforestry in, 88economic growth decline in. 28food production in. 5forest region. 75, 77fuelwood expense in, 82population crises on. 192

Central Electricity Generating Board (CEGB) ofUnited Kingdom. 121

Centre for Science and Environment {India). xvcharcoal. 77, 82Chile

export earnings pay foreign debt interest. 16kerosene price. 41

Chinaaluminum production in. 105automobile in, 157, 169. 173biogas program in. 155coal use increased in, 47dams in, 66, 199desertification In. 10dust storms in, 60family planning in. 24, 25famine in 1980-8I. 188geothermal heat in. 147. 148Global 2000 study in, 31iron and steel recycling in. 110

257

( 24 2 ) Index

China (continued/and log imports from United States. 92nuclear plants lacking in. 131oil consumption reduction in. 38. 47oil exporter. 38. 47oil production increase in. 50Population growth in. 3. 18.24. 31-34rerorestramin in. 89river 5111510M sit. 60soil acidification in. 82soil Vt0S1011 rate estimates of. 34. 57. 60solar cell ',whisky In. 150waste paper market in, 102

Chirac. Jacques. 116Chronar Corporation. photovoltaic equipment

exporter. 133Clark Foundation. Edna McConnell. XIIIclimate change through greenhouse effect. 133closed forests. definition of. 74coal

and air pollution, 133and consequences of its use. 4hquefication. 42, 166and nuclear power. 120-33, 139petroleum solishtute. 4price 111411.4W8 effect aluminum recycling. I0$prate of an West Germany. 121world trade in. 19

{e.alburnIng industries. retrofitted for wnod burning.143

coke. in won ore production. 96Colorado

dryland farming in. 15. 177oil shale deposits M. 14,6wind /union in. 56woodbucmng regulations in. 145

Colombiasilting of hydroelectric resersoirs.tar sands in. 166

conservationand gasoline efficiency. 39

Eastern bloc countries. 47'Third World countries. 40

and tillage. 72Conservation Foundation. Slate of the Entironntelis 1982.

xsConsumers Power Company of Michigan. financing

nuclear power. 124container deposit legislattoo. 4. 108-09. 113-14contour fuming. soil erosion measures used in. 71cooking fuel. cost increase. 2. 78 set also kerosene and

woodCoors Brewers. reticles cans. 108corn

alcohol fuel base of. 167-68Ceorgia sidds of. 63grown in topsoildeprised ens tttttt mem. 62.63hybrids in Thid World. 176, 179and North America feed bag. 184as raw crop. 35

corn belt states. soil erosion in. 53. 54itoporaie tiankruptries. ICosta Rica. 84. 164Council On Lnvironmental Quality Maned Stales/. ay.

10. 30. 75cow dung. used instead of firewoed. 42. 78Cro11, Elizabeth. 31crop residues. use instead of firewood, 42. 78crop minion. midwestern United States. 55. 180crop surpluses. United States. 5. 180crop fields. decline in. 61-62cropland abandonment. 60-62cropping patterns. 53Cuba. birth rate in. 24, 26Crechoolovalia

acid rain effect in, 10. 79. 80coalburning power plants. 14

non and sleet recycling en. 109-10natural gas substituted fur oil. 42nuclear program in. 128population stabilization possible. 23

Dacca (Bangladesh). fuelwood price in in. 83Daly. Herman. 29dams. 63. 175. 199Dangler. E. W . 54Data Resources Incorporated. 194death rates. reasons For decline in. 24declining standard of living. tee populationdeforestation

and timid economic growth. act. 18economic effects of. 2. 82-86forces behind. 74- 79.82 -83in Third World countries. 5. 192in tropics. 74

Delphos project in Italy. photovoltaic demonstrationprojects. 152

Denmarkautomobile ownership discouraged in. 172container deposit law, in. 308n uclear power in 1983 in. 118photovoltaic demonstration projects in. 152public transport system in. 172scrap export limits in, 114thermal efficiency of buildings standard in. 46wind power in. 137. 140

Denver (Colorado). "reverse vending machine" in.log

desertification. 10. 29. 195diesel generators. electricity source in villages. 153.

154Diesel. William. xiiiDobozi. Istvan. 47Dodge Foundation. Geraldine R viiiDokuchacv Soil Institute in Moscow. 60Dow Corning Corporation, 143-45DIM iron ore reduction technique. 110dryland farming. 15Dutch. sty Netherlands

earthquakes. and nuclear power plants, 129. 131East Germany

acid ram in. 10, 79.80iron and steel recycling in. 110n atural gas substituted-for oil in. 42nuclear power industry tn. 128zero population growth in. 23

Eastern Europeautomobile in. 157. 159. 169. 171debt problems of. I. 18. 157land ownership in. 183n uclear industry in. 128recycling iron and steel. 110set also Europe

Echeverria. President Luis of Mexico. 26-27ecologic restoration. economic value of. 90Economic Commission for Africa. 27economic growth

and automobile's future. 157-174and cheap oil. 27from 1979-83. 194and population growth. 17-18. 31-32. 201-02prospects for. 6-8. 195relationship to resource base. 194for sustainable society, 195

economic slowdown, as restriction nn world trade. 19Ecuador. economic growth decline. 28Edison Electric Institute. 133Edwards.] Rodney. 103EEC, see European Economic CommunityEgypt

ferptility in. 31food importer. 184n o room for cars. 169

258

nuclear power in. 131paper recycling in. 103

Eisenhower. President Dwight 0.. 206El Salvador

geothermal energy use in. 149population growth projections. 30

EISwaify. S A.. 54electric arc furnace. 13. 110electrical generating plants. substitution for oil. SO.

47. 134Electricite de France (EDF). 122. 127electricity

as automotive fuel source. 16647coal-fired versus nuclear. 123oil substitution for, 40-41renewable sources of. 134. 150-154wane geothermal and wind power

emission controls for coal-burning power plants. 14employment

and renewable energy projects. 156. 200economic policies that encourage. 198-201see also United Slates. unemployment in

energy. 11-13conservation. 13. 133-34. 154-56costs versus employment costs. 7, 197future constraints on. 27inadequate U.S projections on. SOmaterials recycling. 98 197. tee also recyclingsource Jeterminants. 136supply patterns. 156

energy efficiencylabels on appliances. 46standards for buildings. 46

Energy Fund. in Iceland for geothermal energy. 148energy price

controls and paper recycling. 103reflection of real cost. 94regulations. 106subsidies reduction. 96. 103. 112

Energy Systems Research Group. nuclear operationcosts, 120

Energy, V.S. Department of. ay, 30.51. 125. 151.,154energy-related structural adjustments. 11-13Energy/Development International. report on

conservation in Third World. 40erosion. sec soil erosionErosionProductivity Impact Calculator. U.S.

Agriculture Department, 70eucalyptus, 74-75Eugene (Oregon). 125Europe

automotive industry in. 158. 160deforestation from pollutants. 74 -75.97electricity cost in. 139gas tax. 172nuclear power future insecure. 115 117oil refineries in, 12population growth in. 5solar cell research in. 149steelmakers" subsidies. 1 1 1trade slack. 91wood in.84, 14I

European Economic Community (EEC)aluminum scrap and. 107photovoltaic demonstration projects. 152scrap export restrictions of. 114

exponential growth, 35export embargoes. United States. 6Export-Import Bank (U.S.). 117external debt. 1. 15. 53. 167

fallow land, 54-62, 76family planning

abortion. 2 3. 26access as a basic human right. 3243availability, of. 23economic incentives for. MN 25, 33

Index (243)onechild families. 4, 24. 32-34peer pressure for. 33public education program for. 34religion and. 25reproductive behavior and. 180.208 -209in Sinitic cultures. 24sterilization. 33successes. 26unavailable so Third World couples. 209

famine. 1, 163-164. 175farm debt, United Slaws see United States. farm debt

inFAO. we United Nations Food and Agriculture

Organizationfarm debt. United States. 13. 56, 156-57farm equipment, and soil erosion. 56 -57,59farm products, price rise in. 182farmland, see soil conservation and soil erosionfarmers, convert land to nonproductive use. 189fertility declines, as economic gains increase. 23.27,

33-34fertiliser

from biomass conversion. 200chemical. 55. 62. 153, 178diminishing returns from use. 8manufacture of as major industry. 179needs increase with topsoil loss, 72. 178oil price rises and. 176requirements. 178

phodiufas rows Energy Ecomoinus.Finland

energy forests of. 14Inuclear industry in. 128population stabilisation possible, 23

firewood, see fuelwoodFischer. Lloyd K . 71fisheries. 2. 10. 14.29Five Year Plan, in Soviet Union. 122. 128-29flood damage. 84Flores Rados. M.A.. 94Florida. phosphate fertiliser source. 180food

Agriculture Dept. reports. xi.consumption of, 5Noire constraints on. 27inadequate U.S. projections on, 30relief efforts. 165

Food and Agricultural Organisation. see UnitedNations Food and Agriculture Organisation

food assistance, denial for political seasons. 185food production

increase in costs. 53. 191per capita. 8and population growth. 20. 175. 190price of. 10. 176. 193slowing of 7.28and soil erosion. IO. 30-31. 53, me also soil erosion

food reserves. 5, 161food security index, 185-89food supplies. 175-193Ford pla shutdown, 161Forest Inaustries Renewable Energy Program

(Canada). !41Forest Service of United States. 102. 113forested lands, reduce soil erosion. 172forests. 2. 5. 7444. 113

acidifying. 10, 14. 79area changes. 195clearings and shifting agriculture. 76-77conversion to grating land, 77-78, 180demand exceed supply. 10, 14exploitation of. 93fallow defined. 75heavy metal pollutants threaten, 74.81management of. 144and population growth. 20products of, 30:97

259

( 24 4 )

forests (continued)protection of, 5residue for deetric power plants, 143resources untaialoguecl. 74role in tropical development, 86-87. Re else tropical

fore stsshrinkage of. 10soil crosion and. 172in United States. 4

fossil fuels. world trade in. 19, me else coal and naturalas

fosse uel powcr plants, higher smoke stacks. 35, 80foundations. or Clark. Dodge. Gund. Jones. Mellon.

Noble. Kockereller Brothers. United Nations Fundfor Population Activities

Framatome, nuclear power company in France. 127France

aluminum production in. 105automobiles in. 165. 170buildings-tempcmure controls in. 46(new efficiency cede in, 40. 46fuel efficiency of cars in. 38. 39. 165geothermal heating in. 146. 148German waste exchange used in, 101grain surplus in. 184. 186income distribution ratio in. 202nuclear power in. 41. 116-118, 122-25. 125. 127.

133oil consumption reduction in. 38photovoliaiecs. 133population stabilization possible in. 23resource accounting. 196solar cell industry in. 133. 150, 153sulfur dioxide emissions in. 80

Franke.JOrgen. 122Franklin A ssociates. 97Frazer. John A.. 82Eceeman. °nide. antFreeman. S David. 121Freiburg Institute. 122Friends of the Earth, 103 .Fuchi City (japan). paper disposal. 100fuel, waste paper as. 103-04fuel efficiency. 40, 163-64. 169, see also automobilefuelwood. xvi. 14. 36, 74. 78. 06, 137. 140-45

electricity generation from, 142-43energy statistics Ignore. 154environmental effects of harvesting of. 144-45illegal cutting of. 156industrial use of, 142-43kerosene substituted for. 7residential use of, 4. 123shortage of. 4, 20. 82-83. 90-91transportation of. 10

Ganges River. sedimentation of. 57.60garbage collection. 100. 103gasoline

mileage. 34. 162-63saved by aluminum replacing steel, 104-05tax to restrict autocentered transport system. 171

General Accounting Office (United States). 108General Agreement on 'Tariffs and Trade. 18General Electric. turnkey nuclear plant, 116General Motors. three cylinder car. 164-65Georgia, corn yields on piedmont soils, 63geothermal energy, xvi. 13. 154. 145 -49, 154. 156Germany

acid rain in. 10atom fissioning begun by. 116coal liquefaction developed by. 166see also East Germany and West Germany

geysers. geothermal source. 145-48Ghana

gasoline tax high. 44maternity benefits restricted. 33raw log exporter, 85

Index

2c

glassindustries and higher oil prices. 8. 161in Japan. 100. 106regreling. 108-09. 112. 197

Global 2000 study, xv. 30GNP. and energy ratio. 48. 198Goldman, Marshall, 205Ggrorainbachev. 1kb/it S.. 59

amount grown in 1983, 175carryover stocks. defined. 185-86exports restricted. 185imports for Third World, 6and oil price shifts. 7. 11 -ISworldwide demand. 45. 176. 189. 197worldwide production. 7.26. 176

Grant. Kenneth. 57grass, to contain topsoil erosion. 180Grass. Gilmer, 208grassland deterioration, xvi. 14. 18. 195. see also

desertification and sod crosionGray, Robert. 68grazing. overgrazing. 2. 195Great Plains of North America. 55. 153Greece

photovoltaic demonstration projects in. 152population stabilization possible, 23

greenhouse effect. 133greenhouse heating, geothermal heat for. 146Gross National Product. are GNPGuatemala

geothermal water for cooking. 146population growth projections. 30

Gujarat (India), forestry program in. 5. 87Gulf of Thailand. fisheries peaked. 10Gund Foundation, George W.. xiiiGustafson. Thane. 59

Haiti. hydropower decreased by siltation. 126Hamburg. nuclear powcr demonstration site. 109"hamburger connection." 78Hammer. Turi, 88Hawaii. geothermal electricity for. 149health care, basic needs development strategy, 203heating. 33. 40. 134. 145. steaks coal. electrieity.

fuelwood, geothermal. hydropower, kerosene.natural gas. and nuclear

herbicides. 68Hewlett Foundation. William and flora. xiiiHimalayas. landslides in, 54.84Hiroshima. waste paper disposal. 100Hirshberg. Gary, Myhome insulation, energy efficiency of. 133Homestead Act, land redistribution. 203Honduran Corporation for Forestry Development.

87Hong Kong. lower birth rates. 24. 33hoc springs, geothermal source. 145housing. and family planning. 33Hungary

geothermal heating in, 146iron and steel recycling in. 110nuclear program in, 128zero population growth. 25

hydrogen sulfide. at geothermal sites, 148hydropower. xvi. lvs. 137. 149

decreased by siltation. 84electricity source. 13. 41. 65. 98. 106more localized energy production. 19in Norway. 106in Siberia. 13for Third World r..untries, 4

Iceland, geothermal heat used in. 145-48import restrictions, restrict world trade. 19income distribution, and soil erosion. 53income distribution ratio. 201-02

Index

Indiaacidification susceptible soils in. 82deforestation of Himalayan hills in. 84family planning in. 5. SSfamine %ions in and tinned States intervention.

188fertilizer use in. 179forests in. 5, 76, 84fuelwood burned in. 81, 140grain stocks in, 186income distribution ratio in. 202nuclear power in 122, 130, 131oil consumption increase in. 38, 48population growth In, 21. 27, SO. 192Productivity lndea of soil in, 70recycled paper in, 102rural bias in. 20Ssocial forestry program in, 88sail conservation in, 59. 70soil inventory cost in, 70solar cell energy in. 150, 153wood shortages in, 84World Bank watershed project in. 90

Indian Council for Agncultural Research, soil lossesiimate. 59

Indian Nahum of Management, social fo yprogram, 88

Indian Institute of Science. forest losses in India, 77Indonesia

community sterilization approach in, 33fallowing to resitre soil in, 56fertility decline in. 26geothermal power plant in, 147reforestation of, 94small vans for Ira ,sport in. 200soil erosion and Auden in. 67terracing for soil erosion in. 54transmigration program to outer islands, 26. 77unprocessed log exports from. 86World Bank watershed project in. 90

industrial plantations see plantationsInstitute for International Economics, 17insulation, 58.40. 46intercroppIng. 54Tate raid° nal-Atomic E nergy Agency (IAEA).117, 130. 151International Congress of Soil Science. 72International Energy Agency. 137International Monetary Fund, ay. 18

conditions for continued financing. 52. 171consumer credit restriction in Peru. 173consumer price index, 43domestic oil reduction requirement. 171. 173loans to Third World countries, 51militarization of naiional economies and. 207shoiterm financing for food import bills, 191value of world exports, 18

Investor Responsibility Research Center. 153!oWa, corn grown in poor topsoil. 60

we Ieucaena treeIran

reuniter production in. 180nuclear power 111. 131oil in. 28. 50

Iraqnuclear power in. 131oil production decline, 50

iron, 95-96. i09 -14. 161-62irrigation. 65. 177.200Islamabad (Pakistan). kerosene price in, 41Islip (New York). and waste urce separatior., 101Israel. ay. 131hay

aluminum use in. 105, 113Amazon Basin investment. 13automobile market saturation in, 170gasoline tax. 173geothermal heating in, 147

(245 )

German waste cachange used in. 101iron and steel recycling in, 109-113nuclear power (inure insecure. 126solar cell industry in, 150. 153waste paper use in, 101zero population growth in, 23

Ivory Coast, fuelwood pnce increases, 83

Jacobsen. Judith, SSJapan

air pollution in. 196aluminum use in. 105 -07. 109. 113Amazon Basin investment Ly, 13automobile industry in, 38-39, 107. 158-60, 165bicycle sales in, ISbirth rate in, 25car market saturation in, 170electricity eons, 106-07, 152electricity generation with oil in, 92Energy Conservation Law in, 46food importer, 184ruei efficiency in. I62 -65geothermal heating in, 147-48Global 2000 studyin. SIhot springs in, 147income distribution ratio in, 202iron and steel recycling in, 110Ian.; redistribution ir, 202lightwater reactor project with other countries, 129nuclear power ir., 41, 115. 123, 125-26, 129, 153OECD nuclear power prediction about. 3oil consumption reduction in, 38, 48, 57paper recycling .in. 4. 107pollution effect In, 196population growth in. 2.2Sresource accounting in. 196silicon cell production in. 151solar cell industry in. 149-50. 151solar hot water heater grants in. 46solar power plant in, 152state of the environment report in, xvtariffs on processed wood in. 86terracing for soil erosion prevention in. 54trade deficit of. 91waste paper recovery leader, 98-102. 103, 115wood imports, 84, 83

lava (Indonesia). 76.95. 169effrey.J.W.. 121ersey Central Power & Light Company, turnkey

nuclear plant. 116Jones Foundation. W. Alton. xiiiordan. Donald, 133udson. Sheldon. 57

Kalimantan (Indunesia). 77Kampuchea, 188Kansas. dryland farming. 15Karnataka State (India). social forestry, program in. 84Kazakhstan (USSR). minimum tillage in. 69Keay:

economic growth decline. 28geothermal energy. 149import duty on cars, 173open fires for cooking. 88solar cell potential. 153

kerosene, 41, 44, 88Kettle Palls (Washingtocl. wood waste burning in. 143Klamath Palls (Oregon). u:c of geothermal heat in.

145-146Kolar District (India). social ,orestry program. 87Komanoff, Charles, 119Kordofan. Sudan. 88Kuwait

fertilizer production in, 180oil production decline. 50photovoltaic negotiations, 153

261

(246) index

Labrador. 13Lagos (Nigeria). traffic tongesiton in. 172lakes, death of related to forest death. 81land

availability and automobiles future. 169prices, and farm debt. 15reform. 194. 202-03scarcity and population explosion. 27use pressures and renewayle energy. 155

landfill. 100. 102. 103. 113landownership, and stewardship of land, 69landslides, due to lack of terracing. 54Latin America

external debt of. 203grain export of. 183. 192income distribution in. 202nuclear power in. 131political conflicts in. 191population crises. 26. 184processed wood exporter, 85shortened fallow period. 56

Lekachman. Robert, 205Lebanon. as food importer, 184Ledec. George, 86Leontief, Windy. 31leucaena tree. 93. 144Libya, as food importer. 184licensing imports. effect on recycling. 102life expectancy, 175, 198. 207lighowaier nuclear plants, we nuclear plantsLimerick 1 nuclear plant, 119Lands to Grow114. xvLimon. Michael. 203tioaid fuels. 154. 166h.eracy. basic needs development strategy. 198, 203litter, container recycling and cleanup. 108. 114Long Island Lighting Company (Lilco). Shoreham

nuclear plant. 124 -25Limns, Amory and Hunter, xivLuxembourg

iron and suet recycling in. 109aro population growth, 23

Lyk Leon, 63

M 'Aida (japan). garbage recycling in. 100machine tool industries, higher oil prices effect on, 8MacKerron, Cordon. 121Maine. container recycling and liner, 108. 113Malaysia

acacia trees in. 93colonization causing forest conversion. 77maternity benefits restricted, 33

Mangla Reservoir in Pakistar.. 65Maricopa County (Arizona). competition for water.

1

market7development, f o r steel recycling, 1 1 1

Maryland, recycled paper law in. 103materials recycling, monthly data on. 197

MMatsumoto. une°. 100Mauna . oa Observatory (Hawaii). observations of

atmospheric soil CM. 58Maynes. C. William, 204McVay, Scott, ixmeat, produced with U.S femora's's. 182, sit afro beefmedical technologies, and distribution of health care,

203Melton Foundation. Andrew W., xi,:Merril. Lynch Company. nuclear plant closing list. 124metal scrap, 98 set also iron and steelmetals recovery. advantages of. 96methane generation from biological waste. xvi, 134.

137.200iethanol distilleries for world markets. 156

Mexico. 31aluminum in, 106automobiles in, 164, 170desertification in. 10

export earnings pay foreign debt interest of. 14.194

fertility decline in. 26gas price rise in. 51. 171. 173geothermal energy in. 147, 149Global 2000 study in, 31income distribution ratio in, 202nuclear power in. 131oil consumption increase in. 38as oil exporter. 38, 49.50oil price drop unanticipated in. 16population growth projections in. 20-21, 26-27. SO,

Productivity Index of soil in. 70scrap recycled in, 13soil erosion and siltation. 67solar cell industry in, 149waste paper use in. 13, 99. 101-02

Mexico City. 172Michigan, container recycling creates jobs in. 108, 113Middle East

dem tificauon of. 10economic growth decline in. 28food production in. 5-6income distribution in, 202

military expenditures. 5-6. 15. 118, 204-06milk, produced with U.S. feedgrains. 182minimum tillage, limits to, 67minimum wage, 199Ministry of Environment (India), xivMinistry of Environment (Norway). 196Minisiq of International Trade and Industry (Japan),

1

Minnes9ota, 'topsoil erosion in. 62-63Mississippi River. 57-58. 67Missouri, soil erosion. 55. 60. 62Mitterrand. President Francois, 127Monnet, jean, 207Montana, woodburning regulations in, 145mopeds and motor scooters, supplement public

transportation with. 203, 208Morocco. as phosphate fertiliser source, 180mortality rates, see death ratesmountain regions, and terracing. 54Murray. Anne, ixMyers. Dr. Norman, 76. 78.94

Nagpur (India). and tree cutting. 78National Association of Recycling Industries, 101National Committee on Environmental Pinning

(India). 66National Resources Inventory (U.S.), erosion data,

55-60National Soil ErosionSod Productivity Research Ping

Committee (U.S.), 62, 70natural gas

exports from Soviet Union. 42in nitrogen fertilizer industry. 180as substitute for oil. 40-43and waste paper recycling. 103-04world trade in. 19

Nepalterracing for soil erosion in. 54forested hillsides used tn. 77no income tax deductions for children. 33World Bank watershed project in. 90

NetherlandsAmason Basin investment of. 13container deposit laws in. 108nuclear industry in. 128paper recycling in, 4, 100-03population stabilization possible in. 28resource accounting system in. 196resource recovery in. 10043solar cell industry in. 150xr waste paper recovery leader. 98-99. 100-101. 113

and farm in. 139-40

262

Ncw Alchemy Institute. InvNew England, fuelwood use by homeowners in. 142New Energy Development Organization (japan). 152Ncw Guinea, processed wood 111. 86Ncw Hampshire, wind farm in. 138Ncw York. 143

combiner dcp OM laws in, 108nuclear power cost in. 119

New Zealand, geothermal fields of. 13newspaper recycling. 95Nicaragua, population growth projections of, 30Nigeria. SI

cereal yields of, 56erosion on unterraced land in. 54fallowing soil in, 56iron producibln from scrap, 110oil and population policies on. 28oil price drop unanticiapted in. 16population growth in. 21 30-31Produciivity Index of soil in. 70soil siltation disasters in. 67wood exporter 16. 85

Nine Mile Point 2 nuclear plant, 119n ommen. 55. 64. 81. 179.40n urelen oxides, threaten foresos, 74Nixon. President Richard, 117. 184Noble Foundation, Edward John. muNorbergHodge, Helena. xivNorth America

acid rain in. 10, 79agricultural °input. 5, 175elforemasion from pollutants. 74export embargo on grain, 184food production outstrips population growth. 5.30.

175grain supplier, 6, 18245MOM' power projections of 1970. 115sulfur dioxide emissions in, 80tropical Asian hardwood user, 84wood waste in. 141. 144ie. also United Stases, Canada, and Mexico

North Dakota. "reverse vending machine" in. 108North Sea, wind farm located on. 140

Aluminum in. 104-06Awromobile deposit law, 112container deposit laws. 108won and beet collection policies, 112oil prices in, 11oil produnion decline. 50resource accounting symem, 196aero population growth, 22

Nuclear Ent egy Agency of OECD. 132,Awicar potbr plants

capAt.iy in 1973, 117construction cons for. 123-24decomissioning of. 132economics of. 113-35eletoricity costs and. 119future of, 115. 132-35. 136.208lightwater plann, 120. 129opposimon to, 126selling of, 116-18in Soviet Union. 46-47substitute for oil, 3, 41, 133target for military attack. 132in Third World. 130-32In United States 119-21

nuclear submariner, 116nuclear war. 2. 6nuclear waste disposal. see waste disposal, nuclearnuclear weapons, 2. 116. 204NUCOR iron and steel mill. 110nutrition. 188. 203

OECD, see Organisation for Economic Co.operationand Development

Index (247)

Ogallala aquifer, 15, 177oil

as automobile fuel. 42. 159, 166as chemical feedstock. 7conscoation. 38-41consumption. 35-38, 197declining role of. 2. 7. 19decontrol of in United Stabs. 44and economic growth rate. 7. 18and energy productivity, 140, 197food cons and, 7. 176for gumming electricity, 7and grain price comparison, 11natural gas substituted for. see natural gasand population. 18.50price roses for, 43-44, 154. 16142product prices controlled, 36. 42production levels falling, 7, 12, 50-51, 80reduced worldwide dependence. xiv. 3, 35-52rcierves depletion, xvi. 1,8-9. 189. 195substitutes, 40-43versus nuclear. 120. 133

oil shale. 42. 166othimponing. versus oll.exporting countries, 12onechild families. see family planningOntario flidro, nuclear construction costs. 122OPEC

price hike, ay. 3. 12. 35-36Saudi Arabia role in. 50

open woodland, defined. 75Oregon.

container re Wing and job creation. 108woodbm.nirig regulations, 145

Organisation for Economic Co-operation andDevelopment (OECD). 3. 103. 115. 126, 132

OrgO',iPEC

llation of Petroleum Expor:ing Countries, ice

overcuiting, 10, 141overgrazing, 10. 195Overseas Development Council. l°

Pacifis Gas and Electric Company. 138, 147. 152Pacific Northwest of United States, aluminum

recycling in, 105packaging, aluminum for, 106-07Pakistan

deforestasion of Himalayan hills. 83income tax deductions for two children in. 33nuclear power plants in. 130population growth provetions on, 30soil erosion and siltation 67solar electricity_ in. 163

Palo Verde19

(California). nuclear power plain costs.

Panama Canal. 67, 84Papago Indian Reservation. pholovoluits for village

electricity. 153paper. global recovery rates. 113-14Paper Industries Corporation of the Philippines

(PICOP). 89paper mills, types of, 102-03paper recycling. 96-98Peligree Dam (Haiti), situation of, 84Pellworm bland (West Germany). photovoltaic

demonstration projects in. 152Pennsylvania. nuclear power cost, 119Peru

anchovy fishery collapse on, 14, 173automotive manufacturing on, 172-73forest clearings in Andes. 77

pesticides, and oil price roses. 176petroleum, tee oilPhilippines

agroforesery on. 77.84, 89. 93cam.. t earnings pay foreign debt interest in. 16geothermal energy in. 13. 148. 149hydroelearb and orrigasion sew:yobs in. 65

263

(248)

Philippines (conform!)maternity benefits re eel in. 33medical care in. 203nuclear power plans scrapped in. 130photnvolthic negotiations. 153as reyeyclable paper market. 102rice production system in. 201transport in small vans in. 200wood exports. 16. 85woofired electricity in. 144World Bank watershed project in. 90

phosphate. 179. 180photovoltaic solar energy, set solar cellsPhysical Quality of Life Index (PQM). 198plantations. we tree plantationsPoland

acid rain effect in. 10, 79, 80coalburning power planes in. 14embargo against, 1B5external debt of, 194gasoline rationing in. 51. 171iron and steel recycling in. 110natural gas substituted for oil in, 42nuc.car program in. 128United States grain exports to, 185

Puleraym P . 59pollution control. *2. 148population. 2. 3, 4-5, 20-55. 198

arithmetic, 20-23assessment based on Global MO, 31declining living standards and, 20. 29, 197, 201-02densiiy and farming hilly land, 54and economic growth, 5.20. 27. 194, 201 -02and food output, 175And polities, 20. 25. 34, 194and soil erosion, set soil erosionand sustainability. 3tinged Naimoli Fund for Populaiion Adivirics

report. xipopularion/ferithzer and land link. 17840population/resource projections. 29-31, 197Portugal

food importer. 134population stabilization possible in. 23%aye fiver recovery leader. 98

potash. 64. 179poyertr. Bangladesh's definition of, 198Power Reactor Demonstration Project (United States).

116President's Council (South Africa). 178Prince Edward Island. wood heating replaung oil. 141Pringle, 35Proctor and Gamble. 143

Produc may. and soil erosion, 53roduceicit% Index, of actual and potential coop yields.

70Project Independence. 117-18protectionist trade measures. 19, 86Public Service Electric and Gas Company of New

jersey. 123politic 'Tampon. 52. 172. 200puipniill wastes, use of, 141

rail system. sersus automobile, 51. 173rangeland. see grasslandrenclable materials. internanonal wade in, 96recycling, 19.94.114

advantages of, 95-96. 113aluminum, xiii, 4, 13, 95-96, 104 -05, 197glass. see glassiron and steel, 13, 95-96, 197paper mills and. 102-03replaces throwaways. 4, 114. 197scrap paper, 13, 97-104, 197sustainable development strategy. 2-3. 197voluntary efforts al. 96

refr.gerators. 46. 103, 185. 187

Index

Reagan. President Ronald. 15. 103. 185. 187Renault. 165renewable energy

development of. 136-56locally available. 208nonnuclear sources. 132resources. 4. 19. 208share of world energy. 137substitute for oil, 40-41. 199set also wind power. fuelwoodegeothermal energy.

and sold cellsreproductive behavior. is family planningresource accounting. 195-96. 198Resource Conservation Act of 1977. 58. 196resource depletion, effect on debt, 1, 16. 189resource stocks, monitored at global level, 195retrofitting of buildings, 13, 40, 45-46"reverse vending Machine." 108Reykjavik (Iceland). heat from geothermal fields. 147Rice. Andrew, viiiRockefeller Brothers Fund, xiiiRockefeller, David. xiiiRockefeller. Larry, xiiiRockefellerWintfirop Trust, xiiiRocky Mountain Institute. xtvRomania. pet..ot production declining in. 42Roosevelt, Ps .ent Franklin D . 70Rosenson, Ronald, 101rotating crops, soil erosion prevention measure, 14.

71row crops, 14, 55, 156Royal Forest Service (Thailand). 77rubber. 8, 77, 161rural sector. 132. 156. 172, 190-91

Sacramento Municipal Utility District (SMHD),photovoltaic power plant, 152

safety. nuclear power problem, 116Sahel region (Africa). agroforestry in. 88Santiago (Chile). kerosene price in. 41Saudi Arabia

energy production in, 95fertilizer production in, 180food importer. 184oil depletion psychology of, 50as oil producer, 6.49, 50as OPEC member, 50Solera* photovoltaic electricity project in, 151

Scandinaviaacidification of lakes in. 79cooperative waste exchange tn. 101see also individual countries

Schiller. John M.. 56Senn Paper Company. 142scrap paper. building world markets for, 114Seabrook utility plants, 125Sen, Amartya, 189Seoul, air pollution in, 172service stations, decrease In with oil price increase. 12shale deposit, oil from, 166ShethCanada. pelletmaking plants in Pacific countries.

14shelterbelos, to prevent soil erosion. 71shipping, and oil price increase, 12Shoreham nuclear plant. financing of, 124-25shrublands, defined, 75Siberia. 10. 13. 92silicon, in solar pliotovoltAie cells, 149Singapore, 24, SS. 172Sivard. Ruth Leger. 207Sizewell Inquiry (United Kingdom), 128Sky Harbor Airport, photovoltaic electricity for. 151smokestack scrubbers. 40.80social foresiry program, 87Soedjatmoko, 208soil conservation, 2-3, 53-73. 180-81Soil Conservation Service, history of, 55. 58. 70. 180

264

Soil Conservation Society of Ammo.. 72soil depletion. 5. 9. 177soil erosion. 18

agronomic deficit of 189assessment needed. xvi. 70. 195causes of, 54-57costs of. 53, 64-67. 71. 196extent of. xvi. 5.64and external debt, 72and fallosving, see fallow landand food production, Mi. 9. 177governmental role in reversing. am 69. 71. 196and land productivity. 2. 9-10. 63-65. 71. 72.84and navigability loss. 66and new soil formation, 196nutrient loss. 62-64and population_growt h. am 20prevention of. 54-4. 7and siltation, 57, 66.67.84and terracing. 54. 6 9. 71United Nations projections of. 31. 196in United States. 9. 14. 30. 72. 196worldwide. xvi, 10, 71 -73. 196

soil formation and soil toss reports. xvi. 195-96sml mining. 2.9 -10. 71. 185. 195solar

cells. xvi. 134. 136. 149-54collectors. xvi. 4. 200design. 154electrical system, 150-51equipment sales. 13tax credits. 151water heaters. 13, 46. 137. 154, 200. 208

solar thermal electricity generation, 154Soleras, photovoltaic project in Saudi Amiga. 151solid waste disposal. 95. 96. 99-100source separation. 101-02South Africa

coal liquefaction in. 38, 43. 166income distribution in. 204irrigation sites reduced in. 178nuclear power plants in. 130population explosion in. 203President's Council in. 178water scarcity in. 178

South America. closed forest region m. 75South Carolina, NUCOR steel mill in. 110South Korea. 25

automobile assembly in. 160birth rates low in. 24educational deductions for two children in. 33family planning in. 24. 33food importer. 184forestry program in. 5, 90.99. 155, 196. 199gasoline tax in, 44income tax deductions for two children in. 33land redistribution in. 202maternity helical* restricted in. 33nuclear power plants in. 130pollution accounting system. 196recycle scrap in. 13waste paper in. 13. 98-99, 101. 102, 113

Southest Asiaaciekuseeptible soils. 82lot es ts. 78-79

Southern California Edison Company. 152Southern lows Conservancy District, soil erosion

study. 63-64Soviet Union

agricultural outpui in. 5. 175aluminum production in. 15, 105Asian population expanding in, 23automobile in. 159coal production in. 42. 46cropland area in, 59-60demilitarization in, 204(Ryland farming in. 56.60, 177

Index (249)fallowed land reduced in. 56farm equipment and sod erosion in. 59fertilize' production in. 180food output fallen behind demand in. 175forests of. 97gas price set by government. 173geothermal heating in. 147-48gram imports from United States in. 175. 185.

205iron and steel recycling in. 105irrigation canals in. 200militarily strong. 205minimum tillage in. 69natural gas in. 4'2.50nuclear power in. 41. 48. 116-19. 123. 126. 128-29"nuckar winter" research of, 2od dependence in. 37. 46-47. 4 8od production 113, 11. 49-50p-troteum production leveling off in. 41. 42population growth rate in 21.23, 24. 209Sabena, see Siberiasoil erosion estimates for, 59-00solar cell industry in, 149-50substitution for oil by Duties' power in. 48sulfur dioxide emissions in. 80wind machines erected in. 137wood supply of, 91-92

soybeans. 64. 182, 183. 184. 187Spain

aluminum production in. 105iron and steel recycling in. 109Iron and steel scrap user. 114nuclear power future insecure in. 126photos Mime demonstration projects. 152population stabilization possible in. '23solar cell industry in. ISO

Spears John. 89corporation.orporation. expor photovoltaic manufacturing

equipment. 153Sri Lanka

income distribution moo in. 202kerosene price subsidised by gasoline. 44no income tax deductions for children. 33sieriluanon payments in. 33

State, U.S Department of. 30. 185State of Food and Agriculture. xi-xisSzon of Me Enerromme1982. xvStale of Indues Envtronnteni.1982. xvSkis, of Me World's Children. xvStaten Island. Proctor and Gamble wootlfired piano,

143steel industry

charcoal used in. 78energy required for, 95higher od prices and. 8, 161scrap use us, 109-10

sterilization, set family planningstoves, for charcoal burning. 82.'200strip cropping. sod erosion provenston measure, 55.

subsoil. cost of tillage on, 62Sudan. agroforestry in, 88soutareanr. alcohol distilled from for fuel, see

alcohol-based fuelsulfur dioxide. threat to forests. 74, 80. 82Sumatra. 13, 77supertankers, and Aims of oil price increase. 12sustainabitity, 1.-3. 11.90 -94. 197, 198Sweden

automobiles in, 38, 172building codes. 40commuter deposit laws in. 108energy efficiency code in. 40hazardous waste exchange in. 101iron and steel collection policies in. 112nuclear industry in. 126. 128oil imports high in, 141

265

(250)

Sweden levanawd)paper companies use energy from wood residues in.

142"reverse vending machine" in, xvi, 108scrap export limits in. 114solar cell industry in. 150thermal efficiency, of buildings standard in. 4546wind (arm in. 137, 140wood use in, 141

SwitzerlandGerman waste exchange used in, 101food importer, 184nuclear industry in. 126-28zero population growth in, 22

synfufuelel s.

30. 136. 157. see also alcohol as automotive

synthetic fibers, substituted for natural ones. 7Synthetic Fuels Corporation (United Statesf. 166

Taiwanland redistribution in. 202lower birth rates in, 24nuclear power plants in. 190

Tanzania. family planning measures in 33tar sands, 42 166Tasmania, aluminum production in, 106tax credits. 33. 140 we also family planningTennessee. soil erosion in, 60Tennessee Valley, aluminum recycling in. 105Tennes3 see Valley Authority. nuclear power cost. 121.

12leaning. We Soli erosionTexas

cotton grown on desurfaced sod tn. 62dryland farming in, 15. 177wind erosion in. 56

Thailandeconomic value of ecologic restoration in, 89family planning in. xvi, 25. 33forest losses in. 77geothermal water for cooking WI, 146recyclable paper market in. 102rice farming in, 56wood exports. 85World Bank watershed project in. 90

Third Worldagricultural undertnvestment by. 176, 178air pollution in. 172automobile ownership in, 157. 159. 160. 169, 171commodity export of. 16development strategies tn, 203-09external debt in, I. 16-18. 157. 191 - 98.204. we alto

World Bankfamily planning services lacking in, 209fed by North American grain. 6. 182food deficit In. 16. 190forests in. 14. 196fuelwood used for cooking fuel in. 14. 141grasslands in. 196hydropower in. 41nuclear power in, 115. 130-32. we also individual

Countriesper capita income in. 190population pressure in. 5, 54.209renewable energy sources in. 156resource consequences of economic activity in, 196soils in. 16. 54, 196solar electricity gains for. 153United Nations voting record of, 185unemployment in. 198-99waste paper recycling in, 103, 113water resources in, 196weapon purchases in. 6.206wind power ill. 200wood exports. we tropical forests

Morison. Inga. 204throwaway society. 114. 197

Index

266

ICI tans, 109Tokyo, waste paper recycling. 100

we also japantopsoil depletion, we soil erosiontopsoil re serves, in United States. 9transportation

aluminum use results in cost saving. 104elect on recycling. 102employment increase, 201planning, 203public transport, we public transportsubstitution for oil difficult in. 40

Transportation. U.S. Department of. 161tree plantaiions.90-93, 141tree planting. xvi. 141, ser also tropical forestsirerbarvesimg techniques. 144-45Tregubov, P.S.. 60tropical forests

clearing of, 10. 11, 14cropland conversion of. 77deforesiaiion of. 10, 74. 78FAO assessment of. 78global commitment to. 94hardwood in, 16, 84tree planplantations of trees. 93

tropical soils, fragility of, 56, 65, 73Tunisian village. photovoltaic system pumps water.

154Turkey

export earnings pay foreign debt interest in. 16small vans for transport in, 200

Ueda City, Japan, 100-01Ultrasystems. Inc.. electric power plants run on forest

residue, 142Ulrich, Dr. Bernhard, 81underground aquifier, exhaustion of, 15unemplojtment, 1, 12, 161, 198-201. steals*

employmentUnited Kingdom

aluminum production in. 105American designed lightwater nuclear plants in,

121aosion.obik in. 160, 162-65benefited from higher oil prices in. 11bicycle sales exceed auto sales in, 13gasoline tax high in. 44insulation grants sn. 46nuclear power in. 41. 116-18. 121, 123, 126-28oil consumption reduced in. 37,47oil exporter, 39oil production decline in, 50solar cell industry in. 150sulfur dioxide emissions in, 80unemployment high in. 197-98wind farm in. 13T-140zero population growth in, 23

United Nationscommunity forestry projects of. 94population/resource projections. 29study by Leonild 31study group on disarmament and development, 205

United Nations Conference on World Population, 32United Nations Environment Program. xv. 196United Nations Food and Agriculture Organization

(FAO). ay. 14.56, 83, 85, 87, 90-92, 94,, 189United Nations Fund for Population Activities, annual

report, xiii, xvUnited Nations International Children's Emergency

Fund (UNICEF), xvUnited Nations University, Tokyo, 208United States

acid rain in, 10, 79-80agricultural output value of. 15. 180aleoholfuel production in, 167aluminum use in, 104-07

automobile fuel efficient! standards in. 314-89automobile in. 35-36. 157-73automobile industry employment decline. 12. 203banks and Third World deft problems, 17beef imports in. 10.30. 77-78beverage containers in. 108. 113bicycle *ales exceed auto sales in. 1$coal liquefaction costs in. SIcoal,burning power plants in. 14concessiont food programs in. 191corn crop in. 184crop surplus in. 5-6eropland idled in, 186drought in and feed ram prices in. 187-88electricity needs in. 123export embargoes in. 8. 185family farm in. 183farm debt in. 15.67. 181-82farm equipment and soil erosion m. 56-57farm output and topsoil protection in. 156feed gram harvest declines in. 188fertilizer expenditures in. 179-80forests in. 4. 97. 102fuel efficiency rise in, 38-39. 16245fuelwood burned in. 4. 140gasoline sales decline in. 12. 16243geothes mai heat in. 147-48Global 2000 report. 31grain surplus m. 6. 182-84. 186income distribution ratio in. 202interest rates in. 15-16. in also farm debtintervention in famine eonditions. 1118. 191investment capital to arms-production. 204-05investment in Amazon Basin. 13iron and steel recycling in. 100-11irrigation canals tn. 200land redistObution under Homestead Act. 203lighwater reactor protect. 129materials recycling in. 200-01military expenditures of, 205natural gas price control in. 104nuclear power in. '1. 116-119. 123-25. 132oil and grair arisons in, 11oil eonsump in on. 38oil imports e. astically. 133oil production in, 12. 48-49oil shale in. 51. 166population growth rate In. 23. 24, 209Pulp and paper industry in. 142rangeland condition of in. 10recoverable ferrous scrap in, 110-11reduced tillage in. 72renewable energy third party developers in. 154-55scrap export in, 111-12service stations numbers decline in. 12. 162silicon cell production in. 151soil erosion. we sod erosionsolar tell industry in, 149-50. 153steel industry in. 111. 181tax credit for solar heating in. 48, 155tax cuts in, 205topsoil reserves in, 9unemployment in, 1 I. 141. 198-99utilities using wind energy research programs in.

138-39waste paper user. 101-04wind machines in. 137, 154wood exports. 92wood for heating homes iti. 41wood fuel electricity generation in. 141

United States Governmentdepartments nf. err Agency for International

Development. Agriculture. Council onEnvironmental Quality. Energy, Forest Service.Transportation

United States Windpower Company. 138University of Capesown. 20$

Index4

(25 I )

University of London. 121University of Nebraska. 71University of Sussex. 121University of Vermont. Camels /lump research on

and rain. 79-81Urals (USSR). minimum tillage in. 69urban traffic congestion. 169. 171-72Uruguay. *done in birth rate, 26Utah, oil shale deposits in. 167utilities. financial health of. 41. 123-24utility) companies. and nuclear power guarantees.

-17utility industry, and endsse energy efficiency. 133-34

Venezueladomestic price of gasoline. 50fallowing to restore 56food importer. 183forest eleatings. 76oil prize drop unanticipated. 16oil producoon fallen. 50tar sands in. 166waste paper export to United States, 102

VermontCamel's Hump acid ram research. 79-81wood burning replaers oil. 142-44

Vielhues, Dieter. 122Virayaidya, Medial, 25Vogelmann Hubert, 80, 82Vohra. xi., 66. 70volcanoes. geothermal source. 145Volga, minimum tillage in. 69Volkswagen Rabbit. 165

wage demands, rising with higher energy costs. 7Wairakei (New Zealand). geothermal reservoir. 147Well Street _lomat 27. 97Wallace. Henry. 70Washington Water Power Company, 143waste disposal. 98-104, 113-14

nuclear power problem. 116, 129-30. 133paper recycling as Landfill alternative. 99

waste paper. 98-104water

competition For, 20. 177, 189demands exceed supply, 8, 18. 177-78. 195inadequate U.S. projections on. 80. 195pollution of 196renewable energy for pumping. 147. 153surface protected from impurities in geothermal

water. 148and water table declines, 2. 15. 177. 195

water pumping. photovoltaic system, 153-54watersned siltation rate. 85, 66, 90Weak,. Edward. 196Welsh. Professor David. 204West German),

acid rain effect in. 10, 79-80aluminum production in, 104annual economic growth. 28automobiles in, 11 38, 165bicycle sales exceed auto sales in. 11coalburning power plaits in. 14. 121Global 2ooa study, in, 31iron and steel recyeling in. 109-10legisistitm on sulfur emissions in. 82lighowater reactor project with Japan. 129natural gas substituted for oil in. 42nuclear power in. 41. 116. 117. 121-123. 128. 129photovoltaic demonstration projects in. 152population growth in, 23, 28solar cell industry in. 150waste exchange in. 101wind machines erected tn. 137

wheateffect of soil erosion on. 63produced yy U.S.. 65, 182

267

(252)

wholettee hart s g. 1 f 1-14wind decimal generation. mi. 4. 16, v. aiSU %Intl

fontswind energy tax credits. 154wind farms. 4. 137-40. 133wind

155genermors. mature wham b. end of ennui..

wind power. mi. 113-54goternment support 140an %mid. 200

wind pumps. history of. 137-18wind IMAM! so 140wind turbine performance. 4. 137-38. 158women

employment opportunities for and populasubtlisaturn. 23

social and icon independence and fen ritesdecline. 23

woodburning regulations. 145for cooking. we Melt...mildepletion of and sistraitiabiloy. 2feedstock fur chemical. pioduc , 96for fuel. in fuelwoodlot shied Amer gt pruritic non. 19. 144pimmting 01. flit. 145I ec.41able material.. 95-96resurgence of. 140-45thoriages of, 83ay mb.rittor for oil. 40. 41. 96giantism 441%1. 10used Mr liapei 97-98waste, 4. 140

woad - burning boilers. 145wood cookstines. 1St 142. 145wood pellets. minium-414 use of. 144wood,botler.mielustrial. pollution control for. 126wooded lands. extent Of. 64"World Aluminum Industry Stuth." b. World Bank.

109%odd Bank

aluminum ling ignored. 100Attica's economic outlook anal.sis 27casbtrre program, comment. 90c rimming. former. project.. 94conchrions for (maimed financing. 52

Index

Egtplicin garbage collection project. 103GNP decline due to population pressure. 28-29hydropower plant detelopment supported. 41Indonesian wood protesting report. 86Nigerian soil fallow. 36paper rectcling project en Lippt. 103Paper Industries Corporation of the Philippines

{MOP} program, 89population projections. 30Men(' trend toward militarization. 208soil moron expenditures required. 71tulrSaltatan Africa decline in using standards. 29swim purchase in Pakistan. 203watershed prince non efforts. 90Woad Ikbe Talks, 17

World Depelopmene Report, xvWorld 1.0eiolest Oteitemi. xvworld exports. no growth in eighties. 17%odd Fertilit. Suryny desired size, 26, 32world financial serum. and United States deficit.

2181-07twild food demand. mi. 1. 7. 53. 163Build Food Programme. 191-92maid grain surplus. U S Department of Agriculture

mtscalculat 00000 . 184timid Maar, and Soma Expenditures. 207world :Wilco.. expenditures. 205-08world population growth. slowing. 20-21world trade. restrictions on. 19Worldwarch institute

ongoing research. xtram um Cond.' planning. 33protection of 1983 nuclear generating capacity. 3publications ul.

Wwitting. oil shale deposits in. 166

Yashuliova, S.. 39Yellow River Consertancy Commission (China). 37Yellow Riser. 37 -58. 60Yugosla.ia

gas rationing in. 51. 171non and steel recycling in. 110

Zaire. 77I.ebaleen. Egyptian garbage collectors. 103zero population growth. 20-23. 208-09

268