Rio +20 Earth Summit: Down with Fossil Fuel Subsidies and Up with Food Sovereignty

Reason's Science Correspondent sends his third dispatch from the United Nations Conference on Sustainable Development in Rio de Janeiro.


Rio de Janeiro—No United Nations conference is complete without a plethora of side events put on by various officially approved activist groups, and Rio +20 Earth Summit is no exception. I sampled two on Monday. The more promising side event was a panel organized by the Natural Resources Defense Council (NRDC) arguing for "Phasing Out Fossil Fuel Subsidies by 2015." Promising, because subsidies are generally a bad idea, as they waste resources by distorting consumer and producer choices away from more economically efficient outcomes. In 2009, at the G-20 Summit in Pittsburgh the leaders of the world's biggest economies agreed to phase out fossil fuels subsidies. Jake Schmidt from the NRDC cited figures ballparking global fossil fuel subsidies at a projected $775 billion in 2012 [PDF]. The vast majority, $630 billion, was consumption subsidies in developing countries. Global producer subsidies, including special tax breaks, loan guarantees, and export credits, amounted to $100 billion and developed countries provided $45 billion in consumption subsidies.

Schmidt claimed that eliminating fossil fuel subsidies would not only save governments $775 billion, but would also reduce global carbon dioxide emissions by 6 percent, and primary energy demand by 5 percent, if done by 2020. This would mean a reduction of 2.6 gigatons of carbon dioxide which is equal to about half of U.S. annual emissions. He also cited modeling studies that calculated that removing the distortions caused by subsidies would actually boost world GDP by an extra 0.7 percent by 2050.

Schmidt is right when he points out that the subsidies also make it more difficult for renewable energy sources to compete with fossil fuels. Naturally, as an environmental activist, he could not help but mention that according to the International Energy Agency (IEA) subsidies to "clean" energy sources amounted to only $66 billion last year.

But of course all subsidies have their defenders. For example, lots of people object to lifting consumption subsidies in places like Venezuela and Nigeria, arguing that increased fuel prices would disproportionately hurt the poor. Steve Kretzmann, head of the activist group Oil Change International, cited an IEA study that found that in 11 key developing countries 89 to 98 percent of the subsidies don't benefit the poorest people. Why? Chiefly because they can't afford automobiles or electric appliances. And the better off people in developing countries certainly take advantage of the subsidies. If governments want to subsidize the poor, fuel subsidies is a particularly stupid way to do it. On the other hand, trying to eliminate them has provoked protests and riots in places like Indonesia and even an 8 day general strike in Nigeria earlier this year. Phasing out subsidies is the right thing to do, but of course since the panelists are environmentalist ideologues, what they really want is to switch subsidies from fossil fuels to their preferred fuels like wind and solar power.

The second panel discussion I dropped by was on Food Security and Sustainable Agriculture. Oddly, the panelists (whose names and affiliations I wrongly assumed I could get later from the U.N. website) did not actually discuss the meaning of sustainable agriculture. However, they were sure that whatever sustainable agriculture is, it is certainly not modern agriculture.  

One panelist from India provided a deluge of data on the problem of hunger in India. He noted that India was the second-fastest growing economy in the world, and yet 46 percent of its children suffer from malnutrition, down only 1 percent since 1999. He claimed that one third of Indian children are born with low birth weights, which is double the rate in Africa. Two-thirds of Indian women are anemic and one-third of the population have a body mass index below 18.5.

Hunger persists despite the fact that the government of India has a stockpile of 82 million tons of grains. The government has amassed the stockpile by paying farmers a guaranteed minimum price that is considerably above international prices. Now the Indian government wants to export 8 million tons of the stockpile to rich countries like Australia and the United States. Since the Indian domestic grain prices are higher than international prices, the government would actually sell the grain at subsidized prices.

I believe that the first panelist was followed by Soumya Dutta from the All India People's Science Forum who spun a deep conspiracy theory in which the United States launched the Green Revolution of the 1960s as a way to gain control over the world's food supply. Dutta observed that the Green Revolution replaced traditional agriculture with farming practices "based on science and technology, bigger farms, tractors, fertilizers, hybrid seeds and God knows what else." He darkly added, "Now the solution is biotech, but we know what happened to us with the Green Revolution. They want to control our food and food production systems." Dutta noted that the negotiating text in the section on agriculture for The Future We Want at the Rio +20 Earth Summit focuses on trade, market access, and private investment and not at all on "food sovereignty."

What is food sovereignty? The International Planning Committee for Food Sovereignty defines it as "the right of peoples to healthy and culturally appropriate food produced through ecologically sound and sustainable methods, and their right to define their own food and agriculture systems." Supporters of food sovereignty aim to "resist and dismantle the current corporate trade and food regime." Dutta put the whole issue in context when he asserted that the promotion of private investment in agriculture was a "strategy for getting out of the financial crisis." He further explained, "They are trying to get control of all of the world's resources through the financialization of nature" and thereby "sustain the capitalist production system which is now collapsing." I couldn't help thinking, yes, the Green Revolution was such a failure that it allows the Indian government today to hoard 82 million tons of grain and even contemplate exporting part of its surplus at subsidized prices. By the way, 82 million tons of grain was the total amount of grain that India produced in 1960 and since then wheat productivity has tripled.

Returning momentarily to reality, the first panelist from India mildly suggested that it was not true that the Green Revolution had accomplished nothing. He also correctly pointed out that corporations had had almost nothing to do with the Green Revolution and that the private sector still plays almost no role in Indian agriculture. Nevertheless, he celebrated the fact that anti-biotech activists had succeeded in blocking the introduction of an insect resistant biotech variety of eggplant developed by Monsanto in India. He noted that except for biotech cotton, "We have held the line against GM [genetically modified crops] in India."

With regard to the future of agriculture, the first panelist declared, "I see the private sector as part of the problem rather than the solution." Let's see: The Indian government subsidizes energy and irrigation water to Indian farmers and pays higher than market prices for the grain they overproduce and then hoards it when hundreds of millions of Indians are malnourished, and is seriously considering subsidized exports to rich countries. And the private sector in agriculture is the problem. Really?

Tomorrow, I really will be dropping by the People's Summit here in Rio.

Science Correspondent Ronald Bailey is the author of Liberation Biology (Prometheus).