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Cornelius Hirsch: Digging into foreign investment in agriculture

By Parul Tewari, IIASA Science Communication Fellow 2017

Two things are distinctly noticeable when you meet Cornelius Hirsch—a cheerful smile that rarely leaves his face and the spark in his eyes as he talks about issues close to his heart. The range is quite broad though—from politics and economics to electronic music.

Cornelius Hirsch

After finishing high school, Hirsch decided to travel and explore the world. This paid off quite well. It was during his travels, encompassing Hong Kong, New Zealand, and California, that Hirsch started taking a keen interest in economic and political systems. This sparked his curiosity and helped him decide that he wanted to take up economics for higher studies. Therefore, after completing his masters in agricultural economics, Hirsch applied for a position as a research associate at the Austrian Institute of Economic Research and enrolled in the PhD-program of the Vienna University of Economics and Business to study trade, globalization, and its impact on rural areas. Currently, he is looking at subsidies and tariffs for farmers and the agricultural sector at a global scale.

As part of the 2017 Young Scientists Summer Program at IIASA, Hirsch is digging a little deeper to analyze how foreign direct investments (FDI) in agricultural land operate. “Since 2000, the number of foreign land acquisitions have been growing—governmental or private players buy a lot of land in different countries to produce crops. I was interested in knowing why there are so many of these hotspots in the world— sub-Saharan Africa, Papua New Guinea, Indonesia—why are people investing in these areas?,” says Hirsch.

Farming in one of the large agricultural areas in Indonesia ©CIFOR I Flickr

Increased food demand from a growing world population is leading to an increased rate of investment in agriculture in regions with large stretches of fertile land. That these regions are largely rain-fed make them even more attractive for investors as they save the cost of expensive irrigation services. In fact, Hirsch argues that “the term land-grabbing is misleading. It should actually be water-grabbing as water is the foremost deciding factor—even more important than simply land abundance.”

Some researchers have found an interesting contrast between FDI in traditional sectors, such as manufacturing, and the ones in agricultural land. While investors in the former look for stable institutions and good governmental efficiency, FDI in land deals seems to target regions with less stable institutions. This positive relationship between corruption and FDI is completely counterintuitive. Hirsch says that one reason could be that “sometimes weaker institutions are easier to get through when it comes to such vast amount of lands. A lot of times these deals and contracts are oral and have no written proof—the contracts are not transparent anyway.”

For example in South Sudan, the land and soil conditions seem to be so good that investors aren’t deterred despite conflicts due to corrupt practices or inefficient government agencies.

One of the indigenous communities in Madagascar, a place which is vulnerable to land acquisitions © IamNotUnique I Flickr

One area that often goes unnoticed is the violation of land rights of indigenous communities. If a government body decides to sell land or give out production licenses to investors for leasing the land without consulting the actual community, it is only much later that the affected community finds out that their land has been given away. Left with no land and hence no source of livelihood, these communities are forced to migrate to urban areas.

A strain of concern enters his voice as Hirsch talks about the impact. “Land as big as two times the area of Ecuador has been sold off in the past—but it accounts for a tiny percentage of the global production area.” With rising incomes and greater consumption of meat, a lot of land is used to produce animal feed crops. “This is a very inefficient way of using land,” he says.

During the summer program at IIASA, Hirsch is generating data that will help him look at these deals in detail and analyze the main factors that are taken into consideration before finalizing a land deal. At the moment he is only able to give an overview of land-grabbing at the global level. With more data on the location of the deals he can look at the factors that influence these decisions in the first place such as the proximity between the two countries involved in agricultural investments and the size of their economies.

While there is always huge media coverage when a scandal about these land acquisitions comes out in the open, Hirsch seems determined to dig deeper and uncover the dynamics involved.

About the researcher
Cornelius Hirsch is a research associate at the Austrian Institute of Economics and Research (WIFO). At IIASA he is working under the supervision of Tamas Krisztin and Linda See in the Ecosystems Services and Management Program (ESM).

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Do smokers know what they are doing to their life expectancy?

By Valeria Bordone, University of Munich Department of Sociology and IIASA World Population Program

Everyone, consciously or unconsciously, formulates in their own mind a subjective survival probability– i.e., an estimate of how long they are going to live. This will affect decisions in different spheres of later life: retirement, investments, and healthy behaviors. Moreover, previous research has found that subjective survival probability is a good predictor of mortality. In fact, on average, people somehow know better than standard health measures the effect that their characteristics and their behavior have on life expectancy. It is however plausible not only to expect differences within the population in terms of survival, but also in the ability to predict their own survival.

(cc) roujo | Flickr

In a recent publication with Bruno Arpino from the University Pompeu Fabra and Sergei Scherbov from the Wittgenstein Centre (IIASA, VID/ÖAW, WU)., we presented for the first time joint analyses of the effect of smoking behavior and education on subjective survival probabilities and on the ability of survey respondents to predict their real survival, using longitudinal data on people aged 50-89 years old in the USA drawn from the Health and Retirement Study.

We found that, consistent with real mortality, smokers report the lowest subjective survival probabilities. Similarly, less educated people report lower subjective survival probabilities than higher education people. This is in line with the well-known positive correlation between education and life expectancy. However, despite being aware of their lower life expectancy as compared to non-smokers and past smokers, people currently smoking at the time of the survey tended to overestimate their survival probabilities. This holds especially for less educated people.

This graph shows the probability of correctly estimating the own survival probabilities with 95% confidence intervals, by smoking behavior and educational attainment. ©Arpino B, Bordone V, & Scherbov S (2017)

Our study suggests that in fact, education also plays an important role in shaping people’s ability to estimate their own survival probability. Whether or not they smoke, we found that more highly educated people are more likely to correctly predict their survival probabilities.

In view of the high proportion of the American population that consists of current or past smokers, a percentage that reached 77% in some male cohorts, our findings emphasize the need to disseminate more information about risks of smoking, specifically targeting people with less education.

By showing that smoking and education play together in determining how well people can assess the own survival potential, this study extends our understanding of the variability of subjective survival probabilities within a population. The fact that sub-groups within the population differently incorporate the effects of smoking into their assessment of survival probabilities may have important consequences for example on when people exit the labor market or whether they buy a life insurance, as individuals are likely to base their decisions also on their longevity expectations.

Policymakers can therefore draw some relevant conclusions from our study to design policies concerned with health and survivorship in later life. Despite the various anti-smoking campaigns and smoking restrictions, smokers may not be fully aware of the risks of smoking. In particular, educational groups seem to be differently exposed to the information that is disseminated to the public. Our study suggests that there is a need to target such information to less educated people, who are the most likely to underestimate the risks of smoking. Providing information on how survival probabilities vary by smoking behavior may not only reduce smoking but it may also increase individuals’ ability to assess their own survival.

(cc) Quinn Dombrowski | Flickr

Reference
Arpino B, Bordone V, & Scherbov S (2017). Smoking, Education and the Ability to Predict Own Survival Probabilities: An Observational Study on US Data. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-17-012 [pure.iiasa.ac.at/14692]

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

What would an oil spill mean for the Arctic?

By Parul Tewari, IIASA Science Communication Fellow 2017

As climate change warms up the planet, it is the Arctic where the effects are most pronounced. According to scientific reports, the Arctic is warming twice as fast in comparison to the rest of the world. That in itself is a cause for concern. However, as the region increasingly becomes ice-free in summer, making shipping and other activities possible, another threat looms large. That of an oil spill.

©AllanHokins I Flickr

While it can never be good news, an oil spill in the Arctic could be particularly dangerous because of its sensitive ecosystem and harsh climatic conditions, which make a cleanup next to impossible. With an increase in maritime traffic and an interest in the untapped petroleum reserves of the Arctic, the likelihood of an oil spill increases significantly.

Maisa Nevalainen, as part of the 2017 Young Scientists Summer Program (YSSP), is working to assess the extent of the risk posed by oil spills in the Arctic marine areas.

“That the Arctic is perhaps the last place on the planet which hasn’t yet been destroyed or changed drastically due to human activity, should be reason enough to tread with utmost caution,” says Nevalainen

Although the controversial 1989 Exxon Valdez spill in Prince William Sound was quite close to the Arctic Circle, so far no major spills have occurred in the region. However, that also means that there is no data and little to no understanding of the uncertainties related to such accidents in the region.

For instance, one of the significant impacts of an oil spill would be on the varied marine species living in the region, likely with consequences carrying far in to the future. Because of the cold and ice, oil decomposes very slowly in the region, so an accident involving oil spill would mean that the oil could remain in the ice for decades to come.

Thick-billed Murre come together to breed in Svalbard, Norway. Nevalainen’s study so far suggests that birds are most likely to die of an oil spill as compared to other animals. © AllanHopkins I Flickr

Yet, researchers don’t know how vulnerable Arctic species would be to a spill, and which species would be affected more than others. Nevalainen, as part of her study at IIASA will come up with an index-based approach for estimating the vulnerability (an animal’s probability of coming into contact with oil) and sensitivity (probability of dying because of oiling) of key Arctic functional groups of similar species in the face of an oil spill.

“The way a species uses ice will affect what will happen to them if an oil spill were to happen,” says Nevalainen. Moreover, oil tends to concentrate in the openings in ice and this is where many species like to live, she adds.

During the summer season, some islands in the region become breeding grounds for birds and other marine species both from within the Arctic and those that travel thousands of miles from other parts of the world. If these species or their young are exposed to an oil spill, then it could not only result in large-scale deaths but also affect the reproductive capabilities of those that survive. This could translate in to a sizeable impact on the world population of the affected species. Polar bears, for example, have, on an average two cubs every three years. This is a very low fertility rate – so, even if one polar bear is killed, the loss can be significant for the total population. Fish on the other hand are very efficient and lay eggs year round. Even if all their eggs at a particular time were destroyed, it would most likely not affect their overall population. However, if their breeding ground is destroyed then it can have a major impact on the total population depending on their ability and willingness to relocate to a new area to lay eggs, explains Nevalainen.

Due to lack of sufficient data on the number of species in the region as well as that on migratory population, it is difficult to predict future scenarios in case of an accident, she adds. “Depending on the extent of the spill and the ecosystem in the nearing areas, a spill can lead to anything from an unfortunate incident to a terrible disaster,” says Nevalainen.

©katiekk I Shutterstock

It might even affect the food chain, at a local or global level. “If oil sinks to the seafloor, some species run the risk of dying or migrating due to destroyed habitat – an example being walruses as they merely dive to get food from the sea floor,” adds Nevalainen. As the walrus is a key species in the food web, this has a high probability of upsetting the food chain.

When the final results of her study come through, Nevalainen aims to compare different regions of the Arctic and the probability of damage in these areas, as well as potential solutions to protect the ecosystem. This would include several factors. One of them could be breeding patterns – spring, for instance, is when certain areas need to be cordoned off for shipping activities, as most animals breed during this time.

“At the moment there are no mechanisms to deal with an oil spill in the Arctics. I hope that it never happens. The Arctic ecosystem is very delicate and it won’t take too much to disturb it, and the consequences can be huge, globally,” warns Nevalainen.

About the Researcher

Maisa Nevalainen is a third- year PhD student at the University of Helsinki, Finland. Her main focus is on environmental impacts caused by Arctic oil spills, while her main research interests include marine environment, and environmental impacts of oil spills among others. Nevalainen is working with the Arctic Futures Initiative at IIASA over the summer, with Professor Brian Fath as her supervisor and Mia Landauer and Wei Liu as her co-supervisors.

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

Falling fertility rates: Why do wealthier people have fewer children?

By Parul Tewari, IIASA Science Communication Fellow 2017

© KonstantinChristian I Shutterstock

Faced with a sharp decline in the global fertility levels over the last few decades, many countries today are confronted with the problem of an aging population. This could translate into an economic threat: higher health-care costs for the elderly coupled with a shrinking working population will lead to lower income-tax revenues to provide for these rising costs. This can already be seen in countries like Japan, Spain, and Germany. With an increasing number of elderly dependents and not enough workers to replace them, their social support systems have become increasingly strained.

Even though in the last few decades there has been an increase in individual incomes, researchers have observed a negative correlation between the increased wealth and the number of children people choose to have. Sara Loo, as part of the 2017 Young Scientists Summer Program (YSSP), seeks to explore why people are choosing to have fewer children as their social and economic conditions change for the better.

According to a report titled World Fertility Patterns 2015, global fertility levels have gone down from just above five children in 1950 to around 2.5 children per woman in 2015. In the figure below, ‘total fertility rate’ refers to the average number of children that are born to a woman over her lifetime.

It might seem counterintuitive that better living standards would be linked to decreased fertility. One way to explain it is through the lens of cultural evolution. Loo explains that culture is constantly changing – be it beliefs, knowledge, skills, or customs. This change is reflected in people’s day-to-day behaviors and affects their choices, both professional and personal. Importantly, beliefs and customs are acquired not only from people’s parents but are largely influenced by their peers – friends and colleagues.

One of the ways in which cultural evolution has affected fertility rates is resulting from the trade-off between the number of children and the quality of life that parents desire to give each of them, says Loo. As both men and women vie for well-paying jobs to attain a higher standard of living, and as they compete for such jobs based on their education, the resources parents invest into each child’s upbringing, including education and inheritance, are crucial. Even the time parents can give to their children becomes an expensive currency.

This makes for a highly competitive environment in which everyone is trying to achieve a higher status, in order to provide better opportunities for their children. When parents have fewer children, this means giving each of them a greater chance of achieving higher status.

Loo elaborates that as everyone competes to get their children to the top of the socioeconomic ladder, this necessitates a higher investment per child, both monetarily and otherwise. The theory of cultural evolution in this case thus predicts lowered fertility as competition for well-paying jobs intensifies with a country’s development.

However, it is not that such parental strategies apply equally to all segments of a population, says Evolution and Ecology Program Director Ulf Dieckmann, who is supervising Loo’s research at the institute over the summer. He explains that it is therefore helpful to look at fertility in relation to people’s socioeconomic status, instead of just looking at a population’s average fertility rate over time.

This can give telling insights. “In many pre-industrial societies, the rich had greater numbers of children, and if anybody had less than replacement-level fertility, it was the really poor people who could not afford to raise as many children. It was over time that this correlation changed from positive to negative when richer people decided to have fewer children: if they had too many children, they could not afford to invest as much per child as was needed to secure maintaining or raising the children’s socioeconomic status. This has led to a reversal of the traditional pattern: in developed societies, fertility has been shown to drop at high socioeconomic status,” says Dieckmann.

Complementing existing research on the fertility impacts of urbanization and of women’s education and liberation, Loo plans to explore how the aforementioned mechanisms of cultural evolution can explain the observed negative correlation between socioeconomic status and fertility. Her goal is to do so using a mathematical model that can account for both economic trends and cultural trends as two key processes influencing fertility rates.

About the researcher

Sara Loo is currently a third-year PhD candidate at the University of Sydney, Australia, where her research focuses on the evolution of uniquely human behaviors. Loo is working with the Evolution and Ecology Program at IIASA over the summer, with Professor Karl Sigmund and Program Director Ulf Dieckmann as her supervisors for the project.

This article gives the views of the author, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.

 

Interview: Living in the age of adaptation

Adil Najam is the inaugural dean of the Pardee School of Global Studies at Boston University and former vice chancellor of Lahore University of Management Sciences, Pakistan. He talks to Science Communication Fellow Parul Tewari about his time as a participant of the IIASA Young Scientists Summer Program (YSSP) and the global challenge of adaptation to climate change.  

How has your experience as a YSSP fellow at IIASA impacted your career?
The most important thing my YSSP experience gave me was a real and deep appreciation for interdisciplinarity. The realization that the great challenges of our time lie at the intersection of multiple disciplines. And without a real respect for multiple disciplines we will simply not be able to act effectively on them.

Prof. Adil Najam speaking at the Deutsche Welle Building in Bonn, Germany in 2010 © Erich Habich I en.wikipedia

Recently at the 40th anniversary of the YSSP program you spoke about ‘The age of adaptation’. Globally there is still a lot more focus on mitigation. Why is this?
Living in the “Age of Adaption” does not mean that mitigation is no longer important. It is as, and more, important than ever. But now, we also have to contend with adaptation. Adaptation, after all, is the failure of mitigation. We got to the age of adaptation because we failed to mitigate enough or in time. The less we mitigate now and in the future, the more we will have to adapt, possibly at levels where adaptation may no longer even be possible. Adaption is nearly always more difficult than mitigation; and will ultimately be far more expensive. And at some level it could become impossible.

How do you think can adaptation be brought into the mainstream in environmental/climate change discourse?
Climate discussions are primarily held in the language of carbon. However, adaptation requires us to think outside “carbon management.” The “currency” of adaptation is multivaried: its disease, its poverty, its food, its ecosystems, and maybe most importantly, its water. In fact, I have argued that water is to adaptation, what carbon is to mitigation.
To honestly think about adaptation we will have to confront the fact that adaptation is fundamentally about development. This is unfamiliar—and sometimes uncomfortable—territory for many climate analysts. I do not believe that there is any way that we can honestly deal with the issue of climate adaptation without putting development, especially including issues of climate justice, squarely at the center of the climate debate.

COP 22 (Conference of Parties) was termed as the “COP of Action” where “financing” was one of the critical aspects of both mitigation and adaptation. However, there has not been much progress. Why is this?
Unfortunately, the climate negotiation exercise has become routine. While there are occasional moments of excitement, such as at Paris, the general negotiation process has become entirely predictable, even boring. We come together every year to repeat the same arguments to the same people and then arrive at the same conclusions. We make the same promises each year, knowing that we have little or no intention of keeping them. Maybe I am being too cynical. But I am convinced that if there is to be any ‘action,’ it will come from outside the COPs. From citizen action. From business innovation. From municipalities. And most importantly from future generations who are now condemned to live with the consequences of our decision not to act in time.

© Piyaset I Shutterstock

What is your greatest fear for our planet, in the near future, if we remain as indecisive in the climate negotiations as we are today?
My biggest fear is that we will—or maybe already have—become parochial in our approach to this global challenge. That by choosing not to act in time or at the scale needed, we have condemned some of the poorest communities in the world—the already marginalized and vulnerable—to pay for the sins of our climatic excess. The fear used to be that those who have contributed the least to the problem will end up facing the worst climatic impacts. That, unfortunately, is now the reality.

What message would you like to give to the current generation of YSSPers?
Be bold in the questions you ask and the answers you seek. Never allow yourself—or anyone else—to rein in your intellectual ambition. Now is the time to think big. Because the challenges we face are gigantic.

Note: This article gives the views of the interviewee, and not the position of the Nexus blog, nor of the International Institute for Applied Systems Analysis.