Jeremy Grantham–Investing, Population, Environment
Thanks to Fred Stanback for this article. See http://www.nytimes.com/2011/08/14/magazine/can-jeremy-grantham-profit-from-ecological-mayhem.html
Can Jeremy Grantham Profit From Ecological Mayhem?
By CARLO ROTELLA
Published: August 11, 2011
Sitting in a Panera in Boston’s financial district in early July with Jeremy Grantham, I suddenly found myself considering how I might safeguard my children’s and notional grandchildren’s future by somehow engineering the U.S. annexation of Morocco. Grantham, the founder and chief strategist of the asset-management firm GMO, was reading aloud from a rough draft of his next quarterly letter to investors, in which he ranks some long-term crises of resource limitation along a scale from “merely serious” to “dangerous.”
Energy “will give us serious and sustained problems” over the next 50 years as we make the transition from hydrocarbons – oil, coal, gas – to solar, wind, nuclear and other sources, but we’ll muddle through to a solution to Peak Oil and related challenges. Peak Everything Else will prove more intractable for humanity. Metals, for instance, “are entropy at work . . . from wonderful metal ores to scattered waste,” and scarcity and higher prices “will slowly increase forever,” but if we scrimp and recycle, we can make do for another century before tight constraint kicks in.
Agriculture is more worrisome. Local water shortages will cause “persistent irritation” – wars, famines. Of the three essential macro nutrient fertilizers, nitrogen is relatively plentiful and recoverable, but we’re running out of potassium and phosphorus, finite mined resources that are “necessary for all life.” Canada has large reserves of potash (the source of potassium), which is good news for Americans, but 50 to 75 percent of the known reserves of phosphate (the source of phosphorus) are located in Morocco and the western Sahara. Assuming a 2 percent annual increase in phosphorus consumption, Grantham believes the rest of the world’s reserves won’t last more than 50 years, so he expects “gamesmanship” from the phosphate-rich.
And he rates soil erosion as the biggest threat of all. The world’s population could reach 10 billion within half a century – perhaps twice as many human beings as the planet’s overtaxed resources can sustainably support, perhaps six times too many.
To read the full article, please click here: http://www.nytimes.com/2011/08/14/magazine/can-jeremy-grantham-profit-from-ecological-mayhem.html