THRIVING VINEYARDS: Global Turbulence, Local Resilience Insight 2012 - - PDF document

3/9/2012 1

THRIVING VINEYARDS: Global Turbulence, Local Resilience Insight 2012

Envisioning the Future of the Ontario Grape & Wine Industry

March 6 2012 Niagara‐on‐the‐Lake

Thomas Homer‐Dixon Balsillie School of International Affairs Waterloo Institute for Complexity and Innovation Waterloo, Ontario

The Ontario wine industry needs to look beyond narrow provincial concerns. It needs a vision that responds to the industry’s long‐term global context and draws the industry’s components together, instead of pushing them apart.

3/9/2012 2

The challenges facing the Ontario wine industry are a microcosm

• f the challenges facing

Ontario’s economy overall in a rapidly changing – and ferociously competitive – global context. Most of Ontario’s economic challenges in the present arise from:

• increasing competitiveness of imports, and
• decreasing demand for our goods and

services within unstable global markets

3/9/2012 3

Key factors:

• Strong Canadian dollar’s impact on

imports and exports

• Lingering affects of global financial crisis
• n consumer demand
• Extreme global competition in a

deflationary macro‐economic environment

Some of the likely future economic challenges are widely recognized

• Wealth and income polarization
• Demographic shifts: aging and more

ethnically diverse populations

• Ongoing de‐leveraging
• Continued economic volatility

3/9/2012 4

But other future economic challenges are less recognized especially those arising from shifts in costs and availability of resource and environmental inputs Key factors:

• Rising energy costs worldwide, especially

for transportation energy

Will have chronic recessionary impact and become a brake on globalization of (low‐value density) material trade Possible increased regionalization of global economy

• Climate change and more frequent extreme

weather events

3/9/2012 5

Overall, we’re going to see more economic surprises and shocks arising from rising stress on increasingly complex interlinked global economic, ecological, and resource systems.

x x x x

CONVERGENCE and OVERLOAD

Overload Multiple converging stresses

3/9/2012 6

Global food crisis Larger, wealthier populations Environmental damage Rising energy prices Climate change Inadequate agricultural research

x x x x

ENERGY STRESS

3/9/2012 7

3/9/2012 8

CLIMATE STRESS

Decadal mean surface temperature anomalies relative to base period 1951‐1980. Source: update of Hansen et al., GISS analysis of surface temperature change. J. Geophys. Res.104, 30997‐31022, 1999.

3/9/2012 9

Partly because of this rising stress, we now live in a world of constant SURPRISE

3/9/2012 10

3/9/2012 11

Rising Frequency of Extreme Events

Maximum Daytime Temperature Frequency

3/9/2012 12

Rising Frequency of Extreme Events

Maximum Daytime Temperature

X Y1

Frequency

Rising Frequency of Extreme Events

Maximum Daytime Temperature Frequency

X Y1

3/9/2012 13

Rising Frequency of Extreme Events

Maximum Daytime Temperature Frequency

X Y1 Y2

Battisti and Naylor, “Historical warnings of future food insecurity with unprecedented seasonal heat.” Science (9 January 2009): 240‐44

3/9/2012 14

Battisti and Naylor, “Historical warnings of future food insecurity with unprecedented seasonal heat.” Science (9 January 2009): 240‐44

So we shouldn’t be SURPRISED by SURPRISE

3/9/2012 15

In this new world, what should we do?

ONE POSSIBLE RESPONSE:

3/9/2012 16

GET READY FOR A GPT TRANSITION GPT = General Purpose Technology

Railroads Electricity Internal combustion engine Personal computer “Green” energy technologies?

AS ENERGY PRICES RISE:

• People, materials, and products will travel

less

• The cost differential between locally

produced goods and those produced far away will decline and may even reverse

• Production of goods with low value per unit

mass will move closer to consumption; long‐ distance trade of “heavy” products and materials will decline

3/9/2012 17

LOCAL IMPLICATIONS:

• Populations will concentrate in small but

dense communities with ready access to agricultural land

• Stores will be smaller, embedded in

communities, and within walking or biking distance

• Work will be diverse, because communities

will have to supply a larger fraction of all their needs.

3/9/2012 18

RESILIENT people, institutions and societies . . . have the capability to withstand shock without catastrophic failure have capacity for self‐reliance, and are creative in response to novel challenges. We can boost the resilience of our technological, economic, and social systems by:

• Loosening coupling among their

components

• Ensuring self‐sufficiency in key inputs
• Increasing diversity of system

components

• Decentralizing problem solving

3/9/2012 19

Connectivity and Resilience

Connectivity Resilience

• Support local agricultural

production

• Support marketing of local

agricultural products

• Now

3/9/2012 20

3/9/2012 21

Building resilience in the Ontario wine industry What does it mean?

• Encourage diversity of producers,

products, and varieties

• Prepare for input supply shocks
• Go local, go green
• Simplify and reduce regulations

ONTARIO’S ADVANTAGES (or why we should be glad we aren’t Alberta)

Knowledge‐intensive economy Density of post‐secondary institutions Great trading location in North America Still good (albeit tired) infrastructure High quality of life Immigrant‐rich population Extraordinary agricultural resources Scarce energy resources; strong dollar