1. Global Population Growth. Global Trade The Big Picture. David Cohen Presentation for IFS Managers 9/28/2012

Transcription

1 1. Global Population Growth Global Trade The Big Picture WOOD David Cohen Billions of people Source: UN World Population Prospects The 2010 Revision medium variant 1 3 Key Strategic Global Issues four big trends Great Wall of China Population growth 2. Growing economic power of the developing countries AND growth of global middle class 3. Squeeze on world resources (both renewable and non-renewable) 4. Increasing environmental degradation 2 1

2 2. Changing Economic Importance % of World GDP 2% 20% 1% 10% % 0% Percent of global GDP30% BRICs Brazil, Russia, India, China & S. Africa Acronym created Jim O Neil, Chairman of Goldman Sachs Asset Management in 2001 MIST - Mexico, Indonesia, South Korea & Turkey Acronym created Jim O Neil, Chairman of Goldman Sachs Asset Management in 2012 USA China Germany Canada India Source: International Monetary Fund, (IMF) World Economic Outlook (WEO) Database, October A single standard item a Big Mac has different costs in different countries Changing Economic Importance Percent of global GDP Proportion of World GDP (PPP) by Country USA China Germany Canada India Source: International Monetary Fund, (IMF) World Economic Outlook (WEO) Database, October

3 2) Shifting Economic Power Growing economic power of the developing countries AND growth of global middle class new rules, new mindsets, new linkages BRICs will contribute more to global GDP from than G7 (Economist Dec 10, 2011) Developing countries: greatest growth in wealth, poverty alleviation, middle class Need more stuff : requires more resources 3) Squeeze on world resource Rush for long term resource supply both existing and new Renewable & non-renewable resources New form of development aid to lesser developed countries Fundamental shift in commodity pricing (change since 1860 s) 9 11 Issue Shifting Economic Power Economic power shifts to developing regions from developed regions shift from unipolar world to multi-polar world changing values e.g. what is a contract? different meanings in different countries Growth of BRIC and MIST countries Global growth now relies on many countries with state run capitalism, high degrees of corruption, lack of independent judiciary, etc

4 A quick lesson on critical thinking 1 yrs falling yrs stable 1 yrs rising 1 yrs falling

5 Source: Placing the 2006/08 Commodity Price Boom in Perspective by J. Baffes and T. Haniotis The World Band Development Prospects Group July Commodity Price Growth China s Share of World Commodity Consumption China uses >40% of Cement, iron ore, coal, pigs, steel, lead, zinc, & aluminium Source: Grantham, Jeremy GMO Quarterly Newsletter log/gmo%20april.pdf Source: Dobbs et al.,

6 4. Increasing environmental degradation It is not possible to have 7 billion people increasing their consumption and not impact the environment. Extraction (source), Waste (sink), Urbanization (ecosystem fragmentation) Climate change, Desertification, Deforestation, etc. Global problems difficult to solve based on national interests (e.g. carbon markets) Potential Impacts of 4 Changes Competing uses for wood fuel, renewable material, carbon sequestration in products, etc. More varied & strategic supply chains due to increasing transportation cost, avoidance of supply chain disruptions, risk reduction, control all along the chain (eg CoC) Business will lead the way in sustainability critical long term criteria for business success Life Cycle Assessment (LCA) Resource Shortage F s (Nilsson) Competition for (forest) land use : Food conversion to agricultural land Fuel - fuelwood + biofuels Fodder grazing Fibre pulp, rayon, Feedstock for emerging bio-products

7 Key Strategic Global Issues four big trends 1. Population growth 2. Growing economic power of the developing countries AND growth of global middle class 3. Squeeze on world resources (both renewable and non-renewable) 4. Increasing environmental degradation Thinking Points Will the response to resource scarcity be the same for non-renewable & renewable resources? How will they differ? How might if affect wood use, supply &? 2 27 What is the Story Population growth + economic growth escalating resource demand energy mania with few good solutions but many innovations innovative ways of doing everything Power shift to developing regions conflict between old rich and new rich new values, new tensions, new norms 26 7