Both the geography and purpose of my temporary gig have made the fiscal cliff an inescapable topic. And for good reason. The continuing specter of gridlock means some of us…maybe a lot of us…may feel new financial pain starting Jan 1.
And yet, is the “cliff” analogy a bit much? Some argue yes, suggesting that even if gridlock prevails and the full weight of sequestration hits, we won’t plunge into ever-lasting economic chaos. My answer to that one is: depends on who you are talking about. Even in rosier scenarios some people will probably take a hell of a hit. Jobs will be lost, lives will be permanently changed, and it will be the least fortunate among us who are more likely to feel the deepest pain. That will be true in the U.S. and beyond. So yeah…if you look at the mean, perhaps a dose of unpleasant belt-tightening for some indeterminate period is all we face. But just like ecological systems, the mean doesn’t always tell the right story. For those on one tail of that distribution, maybe it’s a game changer…and maybe that starts changing the game for everyone else as well.
In the end, that’s how I see rising fears about “peak phosphorus” (e.g. see here and here and here). Though it’s a finite and irreplaceable resource, the “global we” are not going to completely run out of the stuff any time soon, and probably not ever. (See update on this below, including recent Vaclav Smil piece). Instead, the action is going to be in the degree of belt-tightening that a lack of more efficient P use will eventually demand, and what that means for those on the tail. Those of us with a greater resource base and buffer will adjust. But how hard would, say, a sustained spike in P fertilizer prices hit the have-nots of the world? For how many would that alone be a true cliff? For how many more might it be the final straw of a multifactorial cliff (insert your favorite other environmental threat here)?
We all have to eat. For hundreds of millions of people, that’s still a daily struggle. Layer on a drought, a flood, a disease outbreak and/or an unaffordable bump in the cost of the fundamentals of food production – seeds, fertilizer – and the consequences can be rapid and dire for those already living on the margin. For billions more, the effects may be less immediate but still serious – as food gets more expensive and less available, other fundamentals of life quality degrade, with cascading and long-term implications for health and welfare. All of that means declining P availability becomes a problem long before mineral deposits run dry. Like the impending sequestration legislation, a contraction for some may be a precipice for others.
Potassium: The Forgotten Element?
The phosphorus problems are real – and on two sides of a fence. Be profligate or even just inefficient, and off it goes to the surrounding environment, with serious financial and environmental consequences. Have too little, and you can’t grow enough food. But of late, our lab has begun to worry about the largely forgotten element in all of this: potassium. Like P, K is a finite resource, one where the high value mineable reserves are concentrated in only a few countries, and one where those reserves took geologic eras to form. There’s more of it out there than P….but we need more of it. Plant requirements for K are on par with those for nitrogen, and like N, K has a nasty way of running right out of the system if you don’t get it in your food. It doesn’t receive the same attention as N because when it leaves an agricultural field, it doesn’t catalyze a host of environmental problems.
But just like P, if we run short, or even if it gets a bit more expensive, it will cause shock waves in the global food system that hit the have-nots hardest. As I see it, two things are most worrisome about K. One, when you take a look across modern food systems, it’s already the element most likely to display a shortage. In other words, plenty of high intensity agricultural systems have a surplus of N and P, but run much closer to the line – or even in deficit – for K. The prospects of K deficits and price spikes have already sounded alarm bells in the rapidly changing ag systems of China.
Two, the stuff is already pricey. In natural resource economics, one often sees some version of this:
The graph quantifies something that makes intuitive sense: the rarer an earth element is, the more expensive it is. But like any regression, there’s variance present, and note how K sits above the line….and where it is relative to P. There’s far more K in earth’s crust, but yet a bag of potassium will set you back a lot more than a bag of phosphorus. Why? Most of the answer seems to arise from the ways in which each element must be obtained: unlike P, potassium mines are usually deep shafts, creating the first major price hit in a chain from rock extraction to viable product that ultimately has higher costs for K than P.
And when times get tough, it can get a LOT more expensive. K prices went up roughly 5-fold in the economic downturn of 2008:
And K is more volatile than is P, at least recently. Here’s a graph of the K:P price ratio over the same time period:
Note how K is always more expensive per unit weight than is P, but when tough times hit, the relative increase in K was more dramatic. Why does K look more sensitive to economic swings? I don’t know. I need some resource economists to weigh in on this one.
Beyond the volatility, K’s unholy trinity – high costs, high agricultural demands and high environmental mobility – may call into question recent suggestions from Jeremy Grantham and Tom Philpott that while K matters, P is the more urgent of the two rock-derived fertilizers. I’m not sure you can rank them. I don’t think we are in any danger of a “cliff” for either element in the foreseeable future, but at the very least, I’d argue we have not yet dug into the potassium problem with sufficient detail to understand the landscape of risks, and whether K is a looming problem in its own right as food security issues grow ever tighter. Our lab is headed down that path, but hopefully many others are as well.
Update to Above
A recent column from Vaclav Smil – about as much of an authority on these kinds of things as you could ask for – takes Grantham and others to task for pushing the notion of Peak P (and K). His points are good and valid ones, and I suspect he’d take issue with some of my framing above – perhaps rightfully so. But ultimately, I think Smil and I probably agree on the bottom line: as he says, we are a long ways from running out of either element. Instead, it’s about subtler effects on the price of each element – perhaps from certain regional stocks running thin, or more importantly in the short term, from other factors that affect P and K prices. Sudden (or sustained) price hikes in P and/or K fertilizer are a threat to food security. Buffering against such shocks means improving our efficiency of fertilizer use and seeking ways to ensure a more equable distribution of fertilizer and other resources that allow more stable food production systems in all regions.