Monsanto Company

Economic Growth Sustained By Sunlight And Information

Speech by Robert B Horsch, PhD, President of Sustainable Development, presented at the Royal Society of Arts

Good evening. It is a great honour to be here. I very much appreciate the invitation to come and speak with you this evening, and to talk with you about one of my favourite subjects Ð the relationship between industry and the environment. I think it is a particularly timely conversation.

As we go about our day to day activities, the world feels like a vast place with enormous resources and capacities. The image of the earth from space is what began to change that feeling for me. To see the earth from a great distance is to recognise that it small and bounded - a finite, closed system with a fixed set of resources and a limited capacity to deal with wastes. There really is no "out" in the term "throw it out" - everything remains on earth, we just move it around. We really don't consume food or fuel, we just change its state or quality. We are dissipaters, not consumers of materials and energy. This is the first law of thermodynamics: energy (and matter) is conserved.

What we consume is the quality, energy or information content of materials, not the molecules. We can add to the quality of materials, but only with a greater loss of quality in some other resource, for a net loss overall. This is the second law of thermodynamics - disorder (or entropy) increases in all processes. There is no free lunch.

Yet the richness, diversity and quality of nature has been increasing on earth for most of the last 2 billion years. And humans have been building and enjoying a great richness and diversity and quality of industries and products and knowledge since before recorded history began.

This apparent violation of the laws of thermodynamics is reconciled by the addition of three factors to the balance sheet. The first is the energy of sunlight. This external input is what has fuelled the evolution and what sustains the functioning of life on earth.

The second is the spending of natural capital, treating it as if it were renewable income like sunlight. An analogy is eating one's seed corn, or depreciating an essential asset. This is not a sustainable approach, but humans have made use of this store of quality to the detriment of the natural world - and our own future.

The third factor is information - information that nature has evolved, now residing in genes, species and ecosystems. And information that humans create - now residing in us, our books, our institutions, our infrastructures, our tools. My college text on physical chemistry had a complex discussion of entropy and then a simple statement that "information is negative entropy."

To complete the analogy, sunlight is the fuel underpinning our whole world. We also have a store of resources, both living and mineral, that have a level of quality and information content. We live from the income of sunlight, using the world's natural resource base in ways that depreciate or appreciate it, and also by creating a savings account of new assets that also can then be depreciated or appreciated over time. Knowledge and information are one of the savings accounts. Or perhaps they are more like a capital asset, that can be built upon over time by investing some current income.

The evolution of species and ecosystems on earth has used the energy of sunlight and the inorganic resources already here to produce the huge richness of biodiversity and ecosystems we are blessed with today - a highly information rich biological world. And these two sources of maintaining and improving the quality of materials and systems which nature has used so well, are the also the keys to human industry, economic growth and sustainable development in the future.

Sunlight and information. Our income and our investment.

We are living in a world of rapidly growing human demand for food and energy and other products that are essential to meeting basic needs or that are desired to improve the quality of life. Demand is driven by two big factors, the number of people and the purchasing power each of us has. The good news is that population growth rates have been declining since peaking in 1963, when we had a global population of 3.2 billion people. The bad news is that our population will reach 6 billion on about the 18th of July this year, 1999. And population momentum will take us to at least 8 billion, and possibly as many as 10 billion people in the next 50 years. Despite the current economic recession in many world areas today, the long-term trend for global economic growth projected by the World Bank is 3.4% annually - leading to a doubling of the world economy in the next 20 years.

This combination of more people and more purchasing power will very likely lead to at least a doubling in demand for food, perhaps as much as a tripling in demand in these next 50 years. The demand in developed countries is fairly flat, but in developing countries where many people still consider themselves lucky if they have enough rice or bread to eat, the demand for animal protein and dairy products is strongly tied to income and price. Since animal proteins require several fold more equivalents of grain based protein and calories to produce, the amount of basic food stuffs needed rises very fast when income increases as well as population. Demand for energy and many other products will also rise dramatically.

On the supply side, we have a seemingly comfortable reserve of oil that could last another 50 to 80 years. At this point it isn't clear which is the bigger problem: that we will run out of cheap fossil fuel sometime in the upcoming millennium - or that we aren't running out fast enough to avert causing harmful changes to the earth's climate. In addition, demand for water is already exceeding supply in a number of world areas. A United Nations report estimates that humans currently appropriate about 54% of the available fresh water supplies on earth today, with demand growing to 70% by the year 2025. At that time, they estimate about one third of the people on earth will face moderate to severe water shortages. We currently lose about 25 billion tons of topsoil each year, many times the rate of replenishment. Most lands and soils suitable for productive farming are already in service in most world areas, and marginal lands that could be cleared and ploughed include key habitat for large numbers of species, not to mention the ecosystem services that wild lands provide. Mining and land filling are increasingly restricted and higher-cost activities, in part due to internalising more of the true costs of these activities.

Unless we dramatically change the way we do things we will put an unsustainable strain on the earth's resources and ecosystems. Many would argue that we have already crossed that threshold and must cut back, not expand our resource use. Doing incrementally better at what we've done in the past won't be enough.

Let me turn to the evolution of Monsanto's concern with environmental and resource issues in recent times.

The 1970s and 1980s in the United States marked an era of awakening to threats to the environment. Our government responded with major environmental legislation like the Clean Air Act and the establishment of the Environmental Protection Agency. The focus during this period was on setting up a framework of compliance that would give industry a set of rules to follow. Pollution control was the watchword for this period.

In the 1980s, we moved into what we call the Super Compliance period. At Monsanto, this was marked by the advent of waste minimisation programmes. And during the 20 years from 1975 to 1995 we implemented more than 25 major innovation projects for the manufacture of glyphosate, the key ingredient in our environmentally friendly Roundup herbicide.

In 1988, our then CEO Dick Mahoney announced a commitment to reduce toxic air emissions by 90 percent within five years, and we met that goal. In fact, we were the first in industry to make such a dramatic commitment and keep it, and many others followed our lead. We also participated in a voluntary U.S. Environmental Protection Agency programme to reduce emissions of a handful of chemicals that were deemed particularly hazardous. We met the agency's goal well before the deadline.

By the 1990s we had progressed to Eco-Efficiency, in which the goal was to prevent pollution rather than just control it. At Monsanto, we worked during this period to make our manufacturing processes more environmentally responsible. For example, we designed a new generation, bifunctional catalyst process for glyphosate that both curtails waste and reduces the amount of energy and water used to make the glyphosate.

In 1996 we introduced a "Green" process of fundamental breakthrough chemistry designed to prevent pollution at the beginning of the production cycle instead of cleaning it up later. Monsanto was recognised for this when it was awarded the President's Green Chemistry Award from the Green Chemistry Partnership. Monsanto was one of only five companies to win an award.

So our record during the last couple of decades has been pretty good. Now, at the end of this decade and as we move into the next, we are striving to advance into the realm of sustainability and sustainable development.

I would like to focus the rest of my remarks tonight on agriculture and crop biotechnology, both because it is a critical and promising piece of the sustainability puzzle and because we at Monsanto are working very hard to make progress in this area.

Sunlight and information come together in agriculture. According to the American Solar Energy Association, enough sunlight falls on the Earth's surface each minute to meet humans' global energy demand for an entire year. The sun is a fusion reactor delivering 1.52 x 10 to the 18th power kWh/year of energy to earth.

Green plants are the primary renewable source of energy and bio-materials on earth and one of the key recyclers of air, water and bio-available materials. Agriculture is the foundation of human economies and people's well being. As crop yields have increased, the cost of food has dropped Ð allowing simultaneous increases in the food supply and in income available to be invested in better health care, education, cultural pursuits, and other facets of an improved standard of living. Agriculture is also responsible for humankind's biggest impact on nature, because it is the largest source of competition for land and water between humans and nature.

In agriculture, the challenge and the opportunity is to simultaneously increase the productivity of agriculture per unit of land, per unit of resources consumed, per unit of negative impact on the environment, and to do so without systematically reducing the sustainability of agriculture. Just as increasing economic productivity is the key to economic growth, so increasing resource productivity is the key to sustainable growth. I do not mean to claim that there are no limits to growth. I mean that because we are so inefficient with resource use today, we have a significant window of opportunity to continue economic growth long enough to meet the needs of all people, reach a stable and sustainable human population and provide opportunities for our children and their children that will make this a good world for everyone. But only if we act with both enough urgency and sufficient caution at the same time.

In a very real sense, biotechnology is a type of information technology. It is information that tells cells what proteins to make, when to make them and how to make them. And therefore, it's information that defines what living organisms do and what they are. During the last three decades we have begun to gain access to that information. We are beginning to understand how genes work, individually and together. Our knowledge in this field is expanding incredibly fast, at a compounding growth rate that is exponential. During the next decade we will map the entire human genome and the genomes of other animals, plants and other species will follow soon after. Simultaneously we are gaining an understanding of systems functions and interactions at each level of complexity - all the way from cells to ecosystems to global climate and weather.

In 1965, Gordon Moore, the CEO of Intel, predicted that the computing power of silicon chips would double every 18 to 24 months. This phenomenon, now known as "Moore's Law," is driving the rapid growth of the computer industry. Today, the ability to identify and put to use genetic information is doubling every 12 to 24 months. This exponential growth in biological information is transforming agriculture, nutrition and health care in the emerging life sciences industry.

If used well, the application of that understanding creates new and unprecedented hope for addressing some of the most difficult and intractable problems humanity has faced over the generations. Issues like how to feed people without damaging or destroying land and forests and water and how to prevent human and animal disease, rather than intervene after it strikes. Judicious, reasoned use of these technologies can go a long way towards improving our quality of life while protecting the diversity of the earth's flora and fauna. But we must do it carefully, monitoring ourselves and our technologies all along the way.

Our ability to make global agriculture sustainable faces a number of hurdles. The sustainability of agriculture is threatened by sub-optimal agricultural practices, by super-optimal intensification and by limited availability of technology in areas where biological resources face the greatest risk. The greatest unmet needs in food and agriculture are in developing countries, on small farms with low yields and little access to advanced technology, usually in poor areas.

There are also issues of balances and trade-offs to be decided regardless of the level of efficiency of agricultural practices: Planting right to the edges of streams is more efficient in a narrow sense, but does disproportionate harm to water quality compared to leaving a green buffer strip of diverse, stable vegetation next to the stream. Likewise, setting aside appropriate large and small tracks of wilderness is essential to maintenance of biodiversity, and on-farm management of crops can impact the health of non-farm species that live on or near the farm. The Royal Society for the Protection of Birds has some marvellous literature about these sorts of issues for farmland birds.

Rapid changes in science and technology are occurring all the time in fields such as biotechnology, breeding, integrated pest management, conservation tillage and precision agriculture. At the same time, our knowledge of environmental impact, biodiversity and ecosystems is highlighting the need to change many conventional practices. It has never been more important to look at farming as an integrated system.

Integrated farming systems are a prime example of technology's inter-relationship with the environment and of how packages of management choices can work together for weed control, pest control, soil conservation and water management. And protection of biodiversity. At the crux of one area of discussion about the impact and safety of new technologies is this distinction between the properties of a new product per se versus the impact of how the product is used. The plough made it possible to convert huge tracks of wilderness into farmland; the choice to conserve stream banks and wild areas is rather independent of the properties of the plough per se. On the other hand, for many products, the desired benefits may come inexorably linked with undesired side effects that new technologies might be able to separate, increasing the benefit while decreasing the harm. Broad spectrum insecticides can be effective against the target pest, but may also kill beneficial insects which would otherwise be good for a crop - for example by controlling secondary pests, requiring secondary control measures. The Bt protein found in genetically modified potatoes is quite specific to a few beetle pests of potato, like the Colorado potato beetle. Growers in the US who switch can stop using some of the broad-spectrum insecticides, and have seen a dramatic return of beneficial insects to their fields.

There are three stages in the successful introduction of new agricultural technologies. First, the product's design, second its application in the field, and third the monitoring of the product's performance. Technology and technology development are not static. We have to make sure that we continue to ask the right kinds of questions about new technologies and how all technologies are used. I believe the way products are used will ultimately be as important or more important than the properties of the products themselves (as long as the inherent properties fall within reasonable bounds of safety and predictability).

Let me give you an example: Monsanto's Bollgard insect-resistant cotton. This crop is designed to resist bollworm, one of the major pests. It greatly reduces the need for insecticides. In the case of Bollgard, the need for pesticide applications to control cotton bollworms and bollworms is reduced by 85 to 90 percent. We estimate from grower surveys that Bollgard cotton in the United States has resulted in an actual reduction of about 850,000 gallons of insecticides in the last 3 years.

Bollgard cotton, and our other products with insect control genes, were introduced to the market with an unprecedented requirement. For the first time, growers agreed in writing to use the product in such a way as to help reduce the likelihood that the pests would develop resistance to the added protein meant to prevent those pests from damaging the crop. This insect resistance management programme is multi-faceted and begins by designing the gene so that the crop delivers an effective dose of the insect control protein - reducing the chances for partially resistant insects to survive and breed. The second phase requires the grower to choose among several options for creating a refuge on his or her farm to ensure a population of sensitive, un-exposed insects can survive. These sensitive insects can then breed with any rare resistant insects that might survive eating the insect control protein in the main portion of the crop, reducing the likelihood of a fully resistant population of insects from emerging. The growers also are encouraged to use other tools of integrated pest management, including scouting, rotation, physical controls, and limited applications of insecticides. Finally, insect populations are monitored for emergence of resistant or partially resistant insects so that alternative means of insect control can be used.

This combination of how the product is designed, how the product is used, and monitoring is a powerful approach to stewardship.

Now let's look at another example of technology: Monsanto's Roundup Ready soyabeans. Weeds are the most serious threat to cultivated crops, including soyabeans. Glyphosate, the active ingredient in Roundup, is very effective at killing weeds -- so effective that it will kill normal soyabean plants as well as weeds. But Roundup Ready soybeans have an added protein that allows them to resist the effects of Roundup herbicide. Thus Roundup Ready soyabeans thrive even when sprayed with typical doses of Roundup.

This combination can be used very well with no-till farming methods, which eliminate the need to plough to control weeds and expose bare soil for planting. Instead, a herbicide is used to kill weeds, crop residue is left on the fields and seeds are planted through it. Because the soil is not disturbed or exposed by ploughing, it is much less susceptible to erosion from both water and wind. No-till has been shown to decrease erosion rates by 90 percent and nutrient and pesticide runoff by 70 percent compared to conventional tillage. And less ploughing means less fuel used in tractor engines, fewer emissions and less time and labour on the farmer's part.

By employing an integrated program combining no till techniques with Roundup herbicide and Roundup Ready seeds, a farmer can save fuel, reduce carbon dioxide emissions and reduce machinery wear by avoiding ploughing. The farmer can also conserve almost all of his or her topsoil, increase the level of organic matter in the soil, reduce nitrate run off and cut the loss of soil carbon. In addition, the farmer who plants Roundup Ready soybeans while using conservation tillage and Roundup herbicide can often reduce production costs compared with the cost of traditional farming. The lower herbicide cost more than offsets the higher Roundup Ready seed costs. It is a process of shifting value from chemicals to seed, while reducing the total package cost.

As with the plough, this new technology package could be used right up to the edges of all fields, giving maximum production and productivity both - or it could be used to maximise productivity on some areas and allow for set-asides and borders in others. That is - it could be used in a way that harms local biodiversity - or in ways that benefit biodiversity. I believe technologies like Roundup herbicide and Roundup Ready seeds should be used in concert with a management plan that includes crop rotation, preservation of wilderness habitats, protection of water quality, and provision for local biodiversity. These are not new concerns or issues. And the use of biotechnology will not automatically make the situation better or worse. We need to devise ways to sensibly incorporate new tools, and use the opportunity to also improve our overall stewardship of the countryside.

Let me return to the issue of carbon - a key substance that is valuable in the soil and harmful in the atmosphere, but which is being lost from ploughed and eroded soils and going into the atmosphere. What's wrong with picture?

Climate change will be one of the key global environmental issues of the next century, and Monsanto recognises that the situation is cause for concern and that the scientific evidence indicates that it is time to take action. We believe we have a responsibility to do what we can to continuously improve and reduce our own material and energy use, and to develop products and techniques that will help our customers to do the same.

In 1997, Monsanto entered into a partnership with the World Resources Institute, British Petroleum and General Motors in which we each agreed to examine what we could contribute to reducing greenhouse gas emissions. Monsanto's contribution focuses on improving the eco-efficiency of our operations, and on conservation tillage and other ways to improve efficiency in agriculture.

No-till farming, is showing great promise for soaking up carbon dioxide and retaining carbon in the soil. As I explained before, with no-till, crops are planted into the previous year's stubble without ploughing. The plants then absorb carbon dioxide during photosynthesis and return carbon to the soil through crop residue. Tillage that exposes soil to the atmosphere greatly speeds up oxidation of soil organic matter, which is released to the atmosphere as carbon dioxide. This is bad on all counts: fossil fuel is burned to pull the plough, soil organic matter is lost to the atmosphere, the soil is more easily eroded, compacted, and less able to absorb rain. No-till farming methods can sequester as much as one-half ton of carbon per hectare per year, which is equivalent to the carbon released from burning 50 gallons of fuel.

Biotechnology can also potentially be beneficial in the development of plants that sequester carbon dioxide, microbes that better stabilise soil organic matter, better salt- and drought-tolerant plants and new enhanced feed or feed additives that reduce methane emissions from livestock.

At the meeting late last year of the United Nations Framework Convention on Climate Change in Buenos Aires, Argentina. Monsanto and others worked hard and successfully at the meeting to persuade delegates to look into agricultural carbon "sinks" as a way to reduce atmospheric greenhouse gases. Carbon sinks are natural systems, such as forests, that absorb carbon dioxide from the atmosphere. In the case of a forest, trees absorb carbon dioxide and lock carbon away for decades inside their trunks, roots and other tissues. A growing body of evidence indicates that farmland can also be used this way. The UN group gave a panel of scientists the task of examining carbon sinks and determining whether they should be included in the Kyoto Protocol. They are expected to make a recommendation by May 2000.

I would like to share with you now what I think is a particularly powerful and exciting example of the good that biotechnology can do. It is a technology we have developed and are donating to an effort spearheaded by the U.S. Agency for International Development. In it we are joining a number of private, non-profit development groups to combat Vitamin A deficiency around the globe. Our scientists have developed a method to enhance oil seed crops by promoting production of beta-carotene, which is a precursor of Vitamin A. Today, hundreds of thousands of people in the developing world Ð most of them children Ð suffer from a condition called night blindness. These children can be debilitated for life as a result of insufficient Vitamin A consumption. It can be difficult and expensive to supplement Vitamin A for these population in traditional and overwhelmed healthcare delivery systems.

However, by promoting beta carotene in the oil seed crops that are already being farmed in these nations, one teaspoon of enhanced oil will contain the recommended daily amount of Vitamin A for an adult. We hope this technology will help eradicate night blindness, and the delivery system will be everyday cooking oils.

I want to conclude my remarks with the subject of genetically modified foods. Biotechnology offers us the possibility of making fundamental changes in food quality that we believe will become more and more important to consumers in coming years.

But public acceptance of biotechnology is low, particularly here in Europe, and it is reasonable and necessary to ask: why? I think part of the answer has to do with the acceptance of new technology in general, and especially in food.

There are also some cultural differences between the United States and Europe, as many of you know, and this has also contributed to the public's expression of concern. Americans, generally, are very optimistic about technological progress. Part of the reason, I suspect, for greater concern in Europe, has to do with the impact of problems such as "mad cow" disease in the UK and their impact on public confidence in science, in the public regulatory process and in government.

Another factor, I suspect, is how the first biotech products arrived on the scene in Europe. In the United States, we had nearly 20 years of discussion and debate about biotechnology under our belts before the first agricultural products reached European shores in 1996. Given the accepting attitude in the U.S., I think we assumed that government approvals in Europe were all we needed.

There was very little discussion about biotech outside of regulatory agencies until the first products were approved in early 1996. The first shipments of products from those genetically improved crops arrived from the United States, only a couple of months after those first European Union approvals. Unfortunately that was just when the BSE crisis exploded in the European media. As a result, I suspect that some of the consumer and environmental groups in Europe felt that these products were suddenly being thrust upon them, taken outside their control and being forced on them by American farmers and American companies like ours.

We found, when we ask people here in Europe their views on biotechnology, the reaction is almost universally negative. However, if that question is premised by a purpose - for instance would you be in favour of biotechnology if you knew it meant that farmers would use fewer insecticides? - favourable responses increase to match the unfavourable.

Our challenge now is to listen and respond with information and other actions as appropriate to help the public understand the value and utility of biotechnology. There are tremendous job opportunities which this technology has already created here in the UK. The scientific knowledge and resources in this country are staggering. I hope that by working together, providing clear messages about the means and uses of biotechnology, by meeting consumer concerns with understanding and openness, the acceptance we seek will follow.

Our company has looked at how our technologies can help people in the developing world meet their current and future food, nutrition and health needs. One example is the process I discussed earlier to fight night blindness by enhancing oil seed plants with Vitamin A. There are other examples from our company, as well as from other industry colleagues, of technology transfer for resource-poor farmer needs. For instance, we have been working with the Kenyan Agricultural Research Institute since 1990 to train Kenyan scientists in biotechnology and to develop a virus-resistant sweet potato for use in Africa and other world areas. We have very successful partnerships with NGO's like Winrock and Sasakawa Global 2000 to find ways that glyphosate herbicide can help small farmers better grow food and conserve their soil.

The Earth is a large spaceship Ð a closed system. We receive an income of sunlight. We dispose of radiant heat. We are otherwise limited to the resources and energy stores already on Earth and we are stuck with whatever waste we make. Several billion souls are expected to be added to our planet's population in the next 40 or 50 years. And we're not doing enough today to care for many of the world's inhabitants, human and other species.

The third law of thermodynamics is this: "absolute zero is absolutely unattainable." Only at absolute zero can we have perfect information about anything. And that is impossible. We must have the tools and the will to take action without perfect certainty. We must have a learning system that prevents the problems that can be anticipated and learns from the mistakes that can not.

The precautionary principle tells us that even without full certainty about the paths ahead, we should act to avert serious harm or irreversible harm. I believe that harm is occurring as we sit here tonight. Failure to move forward with sustainable development that makes use of the best new technology, and that fosters global trade and business development, and other forms of sustainable economic growth, is probably the biggest risk we face. Our inertia on our historical track will continue to harm us for sure if we act too slowly.

The complete solution will encompass technological, economic, social and political innovations. No one part of this set can solve the sustainability crisis alone. But working together, I believe we can rise to the challenge. I believe increasing global investment in plant science, agricultural science and agricultural biotechnology is one of the best ways to reduce our risk of environmental degradation and economic stagnation. Real gains in the efficiency of our use of resources, like the ones biotechnology can help bring to agriculture, are one of the surest ways to help alleviate poverty.

To sustain means to support and nurture, not just to continue. To develop means to grow and change. The industry and economy of the future must grow and change to increase the level of support for people while decreasing the throughput and the harm - like biotechnology can do for agriculture. Sunlight and information - income and investment. These are the drivers of a sustainable future.

Thank you.