Weblog Consulting Register Login Subscribe to Free Influx Emails Join our Facebook Group Branding Street Cred Technology Lifestyle Style Entertainment Interviews Art InfluxTV Map Widgets RSS — All Subjects RSS — More Feeds

Search

Advanced Search

Contact Privacy Policy

There's a provocative piece by George Monbiot in today's Guardian, where he talks about the failure of politicians to grasp the concept that there are either higher energy costs from renewable sources or no energy at all.

People are still thinking about alternative energy as alternative to oil, but what if there isn't one? Higher prices are the likely new reality.

Brands thinking about the future are going to have to realize that consumer's disposable income is going to decrease based on increased expenditures on items that we've previously taken for granted; fuel, energy and food. In addition, the knock on impact of this on costs of goods will be significant.

The prospect of decreasing standards of living looms large, but this appears to be the price we are paying for a reliance on an oil-based economy.

"Almost everyone seems to agree: governments now face a choice between saving the planet and saving the economy. As recession looms, the political pressure to abandon green policies intensifies. A report published yesterday by Ernst & Young suggests that the EU's puny carbon target will raise energy bills by 20% over the next 12 years. Last week the prime minister's advisers admitted to the Guardian that his renewable energy plans were "on the margins" of what people will tolerate.

But these fears are based on a false assumption: that there is a cheap alternative to a green economy. Last week New Scientist reported a survey of oil industry experts, which found that most of them believe global oil supplies will peak by 2010. If they are right, the game is up. A report published by the US department of energy in 2005 argued that unless the world begins a crash programme of replacements 10 or 20 years before oil peaks, a crisis "unlike any yet faced by modern industrial society" is unavoidable.

If the world is sliding into recession, it's partly because governments believed that they could choose between economy and ecology. The price of oil is so high and it hurts so much because there has been no serious effort to reduce our dependency."


Posted by Ed Cotton This graph from WTRG Economics, shows the history of crude oil prices since 1947 and shows our current situation in context.

The knock on impact of this in obviously considerable with most industries finding little place to to hide from the impact and effects.The significance of this cannot be under-estimated especially as forecasts suggest the price is unlikely to come down.

With the recent report from the OECD that food prices are also likely to stay high for at least 10 more years, shows that previously "cheap" essentials for life are fast becoming luxuries.




Posted by Ed Cotton Food prices are on the rise everywhere. Causes include- climate change, increasing demand from China and India and the knock on effects from increased ethanol production.

Here's are some clips on the topic..

Channel 4 news in the UK



Reuters on German price increases



It also doesn't look like prices are predicted to decline any time soon, here's a forecast from the FAO for dairy prices.



New York Times on rising global milk prices and weatlhy New Zealand dairy farmers.


Posted by Ed Cotton It might help the environment, but ethanol is wrecking havoc with food prices. Ethanol production is expected to take 27% of the US’s corn crop, taking corn out of the food supply chain and pushing up prices.

Back in February, Influx warned readers about this trend.

Hershey recently announced that its under financial pressure from rising corn prices. It doesn’t directly use corn in chocolate, but it uses lots of dairy product, for which costs are rising, because cattle are fed corn.

Restaurant chain PF Chang's highlighted the impact of rising corn prices on overall food costs, in its recent presentation to investors.




This phenomenon has led Merrill Lynch’s Chief Investment Strategist, Richard Bernstein to coin the phrase “agflation”.

“Food prices are rising, putting upward pressure on producer and consumer inflation. We call this phenomenon "agflation." Given the expanding constraints on food supply, the changing demand for food and the entrance of the energy business as mass consumers of food products, it is not surprising to see food prices rapidly putting upward pressure on overall inflation

Agflation is bad news for the consumer, who is already under pressure from higher energy prices. For the food companies, however, it could be good news as many companies have been able to pass along those higher costs to the end user.”