Blog » 2005 » March

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Houphouët-Boigny ruled rather dictatorially, until growing protests in the 1990’s and his death in 1993. His chosen successor, Henri Konan-Bédié, won the newly-instituted multiparty elections in 1995, and the economy recovered somewhat. But generals staged a coup in 1999, campaigning for government austerity and decreased waste.

The 2000 elections were not successful, and Laurent Gbagbo was put into power after an uprising in protest to his opponent’s attempts to fix the election — 180 died. Alassane Ouattara, a Muslim leader from the north, was disqualified from running on the basis of his foreign birth. Roughly 20% of the country’s population are foreign workers, drawn by the country’s economic strength. Most of these, as well as a fair part of the northern part of the country, are Muslim, and are sometimes (as above) excluded from the political process.

These tensions led, in 2002, to a mutiny of some northern troops. With the support of the northern population, they now control about half the country. Opportunistic fighters from Liberia and Sierra Leone control small parts of the country.

French intervention

France sent peacekeepers, later joined by UN troops, to enforce some early ceasefires and support a “government of national unity” (modelled on South Africa’s succesful transitional government). However, the ceasefires have not held well, and now it is only the presence of the French soldiers which stops the war resuming.

I have vast respect for French actions in Africa, compared to most other developed countries. Of the colonising powers, they left some of the better organised and functional countries upon decolonisation. They are one of the few developed nations willing to put peacekeepers on the ground in Africa, and the only one responding to the continuing tragedy in the Democratic Republic of the Congo (DRC). The DRC must be the worst exploited country in the world, with death tolls in the tens of millions over the course of colonialism, US- and Belgium-imposed dictators, and subsequent post-Cold War abandonment.

But the French peacekeepers are not welcome in Côte d’Ivoire. Last November government jets, resuming attacks on the rebels, “accidentally” bombed a French base and killed nine soldiers. France retaliated by destroyoing the Ivorian airforce of two jets and nine helicopters. Massive street protests followed.

The conundrum

Côte d’Ivoire’s civil war is different to most other long-running African civil wars, in that it is not a desperate rebel group against an entrenched government. It is more similar to the US’s civil war, with two well-organised sides contesting political principles. As happens all to often, the populations of both sides believe they can win, and are all in favour of the war — compare, say, to the enthusiastic populations of Europe at the start of the First World War.

So the peacekeepers are perceived, not only by the armies, but the population as well, as the only thing standing between their side and victory. The current French mission ends on 4 April; the question is now whether they will stay, or leave and virtually guarantee the resumption of the war.

I hope they stay — the alternative is just too terrible. Hope for a settlement remains, as the leaders of the parties are in South Africa for talks mediated by the South African president, Thabo Mbeki, who has been appointed by the African Union to lead mediation efforts. Further assistance from the rest of the developed world would be great — the UN appealed for a mere $61 million for humanitarian concerns in the country (that’s million, not billion), but by last November has received but 18% of that.

It’s a particular poignant issue after seeing the movie Hotel Rwanda last night, and in particular the arrival of intervention forces at the start of the genocide — but only to evacute the foreigners before they left the rest of the population to die.

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Oil is not going to run out suddenly; rather the rate of production growth will start to slow, as happened in the Texas oil fields in the 1960’s. New sources of supply will become available as current ones run out, but only at far higher prices. More to the point, however, is that production doesn’t need to stay at current levels, it needs to keep growing, in order to satisfy demand. The US, with 5% of the world’s population, produces about 25% of the world’s CO2 (a good measure for energy use). As places like China and India start catching up, it is clear that oil demand is going to grow rapidly.

The question is then what will happen as production growth falls behind demand growth. Clearly prices will begin to rise, at a rate determined by the price elasticity of demand. This is essentially the derivative of demand with respect to price, that is, how much a given price change affects demand. The problem is that oil has a very low price elasticity — prices have to soar to affect demand even a little.

There are two ways to demand can be reduced as prices rise: firstly, by substitution, where another, cheaper commodity is used instead of oil; and secondly, by simple reduction in use, as people cut back on using oil. The problem is that neither works well for fossil fuels.

A look at the uses of oil (there are many good websites about this, try for example this one), shows that the main uses are things like energy production, transport, plastic production, and agriculture. None of these are particularly amenably to substitution. Renewable sources of electrical energy are still not suited for replacing the vast majority of oil, gas and coal plants — with the exception of nuclear energy, which faces huge (and in my opinion massively misguided) environmental opposition. Hydrogen cars still require hydrogen to be produced, which currently uses oil; it’s hard to see aeroplanes using anything other than oil-based fuel. Plastics use petrochemicals as their basic input, and there is currently no reasonably-priced alternative. Agriculture relies on huge amounts of energy to drive tractors, and get the food in to our cities, as well as to produce fertilisers, such that feeding six billion people is currently not possible without oil.

Contrast this to, for example, platinum and paladium, produced primarily by South Africa and Russia, respectively. They are seeing massive use in, for example, catalytic converters. It is, however, relatively easy to use either one or the other for this purpose, so historically as one starts to rise in price (from growing demand or trade sanctions), car makers move to using the other, and the price changes are moderated. No such substitute for fossil fuels exists.

So what about people just using less oil? One can characterise goods as luxuries when they are essentially optional — as the price rises, people can just chose not to buy the good. Oil is not a luxury. Electricity is vital to almost everything we do. Without dramatic reorganisation of our cities, people need transport just to get to work. Plastics are used everywhere — even clothing, and it’s hard to see us getting rid of them. Agriculture is obviously going to have to happen, regardless of oil price. So essentially, almost all our current oil use will continue to happen, largely irrespective of price.

Some proof of the above arguments: the oil shocks of last century. Relatively small drops in production due to OPEC tightening or supply disruptions led to huge rises in oil prices. And it’s happening today again: even as OPEC oil supply is increased, just the fear of supply disruptions is enough to send the price up well over 100% over the last year or two.

So what? Clearly, eventually the world will have to do some dramatic reorganistation and development of technology, as oil runs out. There are any number of great ideas, but to make them happen requires huge research, and even huger changes to society. These might include building new power plants, rebuilding our petrol distribution system to use another fuel, shifting our entire plastics industry to use a different set of precursors, and so on. All of these take a long time.

Time which we may not have. When we reach the peak of oil supply growth, which may be only a few years away according to some scientists, prices will begin to rise. But due to oil’s low price elasticity, this will have little effect on demand growth. Prices will rise rapidly, and just keep on rising. We may then be faced with huge price increases in all sorts of goods, notably things like food. Not only will this have a huge effect on the poor, but energy shortages will also make any huge infrastructure changes that are required far more expensive.

Market forces are often a good way of regulating supply and use of various commodities. But in the case of oil, the combination of low price elasticity and the importance of oil to everything we do, might suggest that some other measures be taken. Now if only more of the world’s governments agreed…

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Our responses to social situations, however, seem often to show behaviours better suited to communal, hunter-gatherer societies. Travelling in Germany in December, I happened to go to a Christmas party with a group of German students. Now the chances of EVER even SEEING any of them again are miniscule, but I still couldn’t help thinking about not embarrassing myself. Yes, most people would be sufficiently worried about what a group of strangers was thinking of them that it would, I think, reduce their enjoyment of a situation.

Then yesterday, while riding in Mike’s car, I noticed another failure of “rationality”. Mike was driving, and as always happens, the passenger (me) was more worried about him hitting a pillar than he was — and he was in the right, because he’s done it a hundred times, so is NOT going to hit the pillar. Furthermore, it’s a plastic car (a Saturn), so hitting the pillar wouldn’t even damage it. Mike really couldn’t care less. So, if I were to be a rational agent, I should not even notice the pillar — it’s not even my car! But instead, I’m aware that it’s an expensive item, so I’m uncomfortably worried. And my experience is that almost anyone else would have similar reactions.

A few possible reasons for my reaction:

• Economic self interest: None. Writing the car off would be bad, as there’d be fewer cars for the apartment; damage means nothing.
• Showing Mike I care for his stuff: I didn’t even show Mike I noticed the pillar.
• Wanting to avoid someone feeling unhappy: It’s not really economics anymore, but even this doesn’t work. No damage is going to happen, and anyway, Mike wouldn’t really care too much.

The only explanation that I have so far for the above two phenomena is that we’re acting in a way suited to small bands of hunter-gatherers or early farmers. Here we’d know everyone, or at least know people who knew everyone, so managing long-term relationships is very important. Also, the survival of the band would depend on our joint resources (with less emphasis on individual ownership), so damage to anything of value would be a bad thing.

These impulses are certainly beneficial to society, because for example they reduce vandalism, and make people behave politely with strangers. But I don’t think their value to society is enough to explain everything we do: my worry about Mike’s car didn’t involve an action of mine — I was worried as an observer. And I could have been less self-conscious with the Germans without being actively anti-social.

Man, that’s a lot of thinking from a moment of worrying about a pillar.

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