Food and Energy Security drive global disengagement

Introduction

Acute hunger and poverty bring focus to the issue of food security. However, even outside these areas, food security is a much-discussed topic resulting from overfishing, drought, natural disasters, increasing population, military conflict, and lack of economic development. Energy security is also a focus because of its link to economic development and many aspects of modern life. Hanging over all these issues is the desire by both consumers and governments to reduce their greenhouse footprint.

In an era characterized by Ricardo-style globalization and international trade, the issue soup mentioned above has many countries focused on food and energy security through domestic activity.

Energy Security

The availability, reliability, and cost of energy impact most sectors of a modern economy. In the context of this article, the entanglements between energy and food are worth noting. An extreme example illustrating this is the removal of oil subsidies in Nigeria, which increased transport costs and, in turn, food costs.

Carbon-based energies have been so impactful that large growing countries like China and India still depend on them - a subject of discussion at the recent conference of parties (COP29) where countries like India asserted that developed nations were not providing enough financing to help them transition to non-carbon-based energy.

However, despite the many countries that are still dominated by oil and gas-based energy, there are winds, forgive the pun, blowing in different directions.

The war between Ukraine and Russia has highlighted energy security issues for European countries. Despite the continuing controversies surrounding wind energy, increased capacity can be expected.

“Solar photovoltaic costs have fallen by 90% in the last decade, onshore wind by 70%, and batteries by more than 90%.” Source: our world in data. Dramatic cost reductions have made wind and solar increasingly appealing. Wave, hydrogen, hydro, nuclear, recycled carbon to methane conversion, and biofuels are not part of mainstream conversations but are of increasing interest for different use cases: wave for near-shore use cases, biofuels for shipping, etc.

As alternative forms of energy get more investment and become increasingly easier to deploy, energy production could become more distributed, as an increasing number of countries believe. While only a few countries have significant oil and gas reserves, many have wind, waves, sun, or biomass potential. Energy security, and more control over contributions to greenhouse emissions.

Improved and affordable energy security through domestic production is increasingly plausible and likely, with the caveat of the eternal challenge of more affordable energy leading to increased demand, that, in the short-term, may be a headwind to surpassing traditional sources of energy.

Food Security

While it is not in the headlines every night, there is a horrific number of humans living with and dying of hunger. This hunger hotspot map provides one view of that:

However, even countries not on this map are concerned about food security. Take India, for example, which has nearly doubled seafood production over the last decade to become at least the second-largest producer, supporting 20 million jobs. The importance of seafood to consumers demanding more of what they perceive as healthy choices and jobs worldwide cannot be understated.

Significantly, 55% of India's fish production is freshwater. Near shore and inland fish farms augment ocean and lake fish farms in many places around the wolrd. Overfishing in the wild is a significant concern, and even farmed fishing can depend on smaller wild-caught fish. Even in India, the great armada of Chinese fishing fleets that roam the world are of concern. Large scale fishing operations are an increasing threat to small-scale artisianal fisherman who have been working their trade for generations.

There are challenges with wild seafood, and there are challenges with farmed seafood. There are challenges everywhere regarding providing protein for an ever-increasing global population. Regardless, the desire to control whether food is sustainable, the consumer hunger for what they believe are healthy choices, and the desire to provide food security is likely to see more countries investing in farm fishing and all aquaculture, notably kelp and reef revitalization.

Driving new ecosystems

As more countries look to ensure energy and food security, they will form new ecosystems. Green hydrogen, for example, requires significant electricity to produce, which other alternative energy sources can power. Alternative energy sources can power aquaculture and transport electrification. All these issues are tied up in grid stability through multiple energy sources.

Conclusion

How all this plays out is unknown. Alternative energies are growing, but in aggregate, so is oil and gas. However, it is clear that many countries today are concerned about energy security and food security, which, along with physical security, are the foundations of modern economies. More countries today are looking to control their own destiny in food, energy, and job creation - which provides the opportunity for disruption and new economic ecosystems.