GMO’s Jeremy Grantham continues to warn about global resource shortages, saying in his new quarterly client letter that soil erosion and limited supplies of potash and phosphates “are the real long-term problems we face”.

Grantham says we have the means and brain power to live sustainably. “The problem is with us and our focus on short-term growth and profits, which is likely to cause suffering on a vast scale,” he writes. “With foresight and thoughtful planning, this suffering is completely avoidable.”

The energy sector, Grantham says, is an area where human ingenuity should lead to sustainable practices. Water and metals shortages will be more of a problem, but in the end Grantham says humans “will adjust our behavior enough to be merely irritated rather than threatened” with regard to those problems.

But the soil, potash, and phosphate issues are the real trouble, he says.

“Their total or nearly total depletion would make it impossible to feed the 10 billion people expected 50 years from now,” Grantham writes. “Potassium and phosphorus are necessary for all life; they cannot be manufactured and cannot be substituted for. …Globally, soil is eroding at a rate that is several times that of the natural replacement rate. It is probable, although not certain, that the U.S. is still losing ground. The world as a whole certainly is.” Grantham thinks these problems will lead to many poor countries, most of which are located in Africa and Asia, suffering from increasing starvation and malnutrition.

One big problem in dealing with these issues, Grantham says, is capitalism. While it has many virtues in the short term, he says its ability to deal with long-term issues is severely lacking. “Because of the use of very high discount rates, modern capitalism attributes no material cost to damage that occurs far into the future,” he writes. “Our grandchildren and the problems they will face because of a warming planet with increasing weather instability and, particularly, with resource shortages, have, to the standard capitalist approach, no material present value.”

Grantham says humans have the ability to tackle and defeat the resource problems — the question, he says, is will, particularly given that our political and economic systems tend to favor short-term thinking. One piece of good news, he says, is the rise of “no-till farming”, a key development that could go a long way toward increasing the sustainability of farming.

Grantham says the second part of his letter, which will deal with the investment implications of all of this, will be out in two weeks.