Q&A: Karl Hallding on resource scarcity and a new global paradigm

The analysis, published in the Swedish National Defence College’s Strategic Yearbook 2012-2013, highlights the security implications of this shift. Resource scarcity, the authors argue, will alter the global playing field as nations and corporations change their strategic behaviour. Already, the combination of different challenges is causing tensions and accelerating risk levels at all scales of global society.

SEI Senior Research Fellow Karl Hallding, lead author of the article, presented his analysis at a launch event for the new book. Here he shares his key insights.

Q: You describe a broad and multi-faceted resources dilemma. Why is that happening?
A: Increases in global consumptive demands are simply outpacing the ability to supply most resources. The primary drivers are population growth and increasing economic activity. But all resources have a limited annual yield given current technological systems. In this respect, there is no fundamental difference between physical resources, renewable resources or ecosystem services.

Q: What role are the emerging economies playing?
A: They are providing much of the momentum for both growing demand and global economic growth (and poverty eradication). In a world that is moving from a positive-sum game towards a zero-sum or even negative-sum game, this means as the emerging economies buy into resource markets, prices will keep increasing. This has consequences for countries that cannot afford higher prices.

Currently the most vulnerable economies are those with high costs for resource imports as a share of GDP – particularly oil-importing countries in poor regions of the world. But higher prices will affect the whole global economy; it will also affect the growth potential of the emerging economies themselves, which may have serious repercussions on the global economy.

Q: Are policy-makers addressing these issues?
A: A key finding of the article is that it is the security establishment and the military-industrial complex rather than politicians or businesses that have begun to act on these issues. Climate security and tensions over resources have been instrumental in the changes that have occurred in Pentagon over the past decade, with new institutions such as AFRICOM. A key term here is “threat multipliers”: climate change and other environmental impacts may further destabilize already fragile states in vulnerable areas.

The risk with this type of “hard security” responses to climate and environmental problems is that it may lead to further “securitization” of environment and other global public goods and resources pools. Of course there are ultimately no “hard security” solutions to the combined environment, ecosystem and resources dilemmas.

Q: What do these insights mean for Sweden’s national security?
A: Sweden is deeply interdependent with the European and global economies, so there may be consequences for Sweden from climate-related flashpoints or disasters in other parts of the world. The linkages may be in terms of economic shocks, supply-chain disturbances, migratory pressures, etc. The rapidly changing ecosystem situation in the Arctic plays a special role given Sweden’s northern location, and the emergence of a new trade route along the Northeast Passage will certainly affect Sweden. It is not evident, however, to what extent these new security threats translate to traditional military defence.

Q: The introduction of your article has the telling title “The end of affluence”. What do you mean by that?
A: Consumption greatly accelerated after World War II, and living standards have improved in much of the world. But many indices now point to a situation where supplies cannot be increased further – or only at great expense. This gap between a limited supply and continually growing demand is associated with escalating tensions and growing risks of overt conflict over remaining resources.

We can already see new geopolitical patterns, where the most powerful emerging economies, for example, are collaborating in groups such as BRICS, BASIC, IBSA and the G20. But it is important to stress that growing competition over resources and/or shrinking ecosystem services do not by necessity create war. There are also opportunities to build tighter cooperation to find joint solutions and to avoid escalating security risks. The big question is to what extent the world has the global governance mechanisms needed to deal with the environmental, ecosystem- and resources-related tensions.

Q: You write that “the preconditions for a race to the bottom” are in place. Can it be avoided?
A: There are several avenues that could be used. Continued dialogue on climate change could gradually lead to firmer commitments and channel investments towards alternative energy and energy efficiency rather than on military technologies. We could also work to ensure a level playing field in global trade.

Q: You present four scenarios for the future, the most optimistic being “Green Hope”, with moderate price increases and limited impacts. Is there a recognition that urgent action is needed?
A: No, there are few institutions, particularly in political circles, that take these threats seriously. I think there is a misconception that climate change and other resources challenges are happening gradually. The big problem is that was will really define the future is the occurrence of extreme events and increasing variabilities and volatilities. Global grain production, for example, is extremely vulnerable to variability, so what matters is not a gradual temperature increase, but a growing amplitude between extremely wet years, when harvest are washed away, or extremely dry years, when yields are low.

Learn more about the book chapter »