On September 22nd we celebrated the autumnal equinox when night and day are in equilibrium. The two equinoxes in March and September symbolize the sacred balance between light and darkness. But September 22nd also marked another watershed between light and darkness that shattered both balance and equilibrium.
Just one day after the equinox, the Global Footprint Network announced that the planet had slid into deficit. September 23rd was Earth Overshoot Day. In less than ten months, global society has consumed what it takes the planet twelve months to produce. For the rest of the year we will be dipping into our ecological reserves and borrowing from the future.
At the same time, in a series of reckless financial ventures and lavish compensation packages, the barons and brokers of Wall Street triggered an economic crisis. The contagion spread rapidly as stock markets imploded around the world. Billions of dollars of investments and retirement savings vaporized, severing the social contract between Wall Street and Main Street.
Balance and equilibrium vanished overnight. Both balance and equilibrium are cherished terms among economists and also fundamental foundations of ecological stability. In addition, they are essential pillars of a cohesive society. In the midst of the financial storm, environmental concerns among the public predictably vanished as well.
Global finance or global ecology? Are we so blinded by self-interest and so captive to the traditional tenets of economic orthodoxy that we are oblivious of the indivisible relationship between the economy and the environment? Are we not aware that our consumption footprints far exceed the biocapacity of the planet? Do we not realize that economic recovery is only possible and sustainable if we first balance nature’s books?
Turmoil in the world economy, depletion of natural resources, pollution and the threat of global warming will soon confront us with fundamental questions and choices. Some of our iconic economic values and practices will undergo a seismic shift. These assumptions include easy access to resources, technology as environmental saviour, the magical role of the market, globalization and trade liberalization, as well as consumption patterns and economic growth discussed in the previous article.
A key concept in the study of economics is the notion of scarcity and how scarce resources are allocated among competing interests either by market mechanisms or government planning. The emphasis on scarcity may be misleading, however, since not all resources are scarce.
Food is an example of an abundant, renewable resource where market based solutions have failed. The problem with food shortages is inequitable distribution and price fluctuations, often related to hoarding and speculation. In addition, government subsidies for products, such as corn-based ethanol, exacerbate food shortages. Tragically, half the food produced in North America is wasted. Squandering food while millions in the world starve is a moral issue, not a market problem.
Oil is a non-renewable resource and it is scarce. Production has peaked at about 88 million barrels per day. No matter the present gyrations of oil prices – due to speculation, shortages, and now, recession – the era of cheap oil is over. In a feeding frenzy that will last about two centuries, we will have depleted a resource four hundred million years in the making – with nary a concern for the energy needs of future generations.
An early casualty of scarce and expensive oil will be globalization. International tourism will plummet, except for a wealthy elite, as recreational flying becomes prohibitive. It is not only highly refined aviation fuel that will become expensive, but even the lowly bunker fuel used by freighters. Bunker oil is also the dirtiest fossil fuel after coal.
No longer will it be possible to ship fish caught off Newfoundland to China for processing and then import the same fish as frozen fillets. No longer will we be flying flowers and asparagus in from South America overnight. The escalating costs of importing cheap consumer goods from China will bring new life to the rustbelt of North America as plants reopen and domestic production gears up again.
The decline of globalization is already underway as the terms of international trade start changing. At the recent Doha round of the World Trade Organization talks, the developing countries made it clear that they would no longer be the dumping ground for subsidized food and electronic waste from the developed world. When we dump cheap corn on Mexico and drive farmers off the land, do we not understand why we get a flood of illegal migrants in return? Trade, after all, is a two way flow.
The theory of comparative advantage which was the basis of international trade for three centuries has become distorted. No longer do nations trade largely on the basis of geographical advantage, such as importing bananas from tropical areas. Modern trade routes have been shaped by the exploitation of cheap labour, the location of international garbage dumps, inexpensive transportation and the lightning speed of global capital flows.
Ironically, trade liberalization that has been largely driven by wealthy countries may be reversed by the same countries. The Obama administration will likely introduce a new era of protectionism by reopening NAFTA. Growing concern about global warming could lead countries to impose carbon tariffs and punitive sanctions on products from polluting countries, such as tar sands oil from Alberta.
The moral justification for globalization that it will raise the prosperity levels in the developing world is largely fraudulent. The “trickle down” theory of wealth distribution and the analogy of a rising tide lifting all boats simply do not hold water. Globalization has benefited the developed world and the elites in the developing countries – the only boats to rise on the tide of prosperity are the yachts of the wealthy.
To modify the metaphor, a more sinister tide is the rising “red tide” of toxic algae blooms that threatens to engulf the planet. Unfettered globalization, generating ever more consumption, is environmentally destructive and ecologically unsustainable.
Indeed, we do have a moral responsibility to raise the living standards of all impoverished people but it can only be achieved by reducing our own expansive footprints, not by exporting our ruinous consumption practices. Wealth must be redistributed in an environmentally benign way, such as improving education, health, nutrition and gender roles.
Technology is a double-edged sword in the environmental battle. While it improves the efficiency of resource use, it can discourage conservation and actually increase consumption rates, as well as spawning a range of negative side effects.
William Jevons pointed out 150 years ago that improved efficiency in the use of coal due to technological innovation actually increased the demand. The “Jevons Paradox” is used to explain how technological progress, by reducing the cost of energy, can increase its consumption and drive environmentally destructive economic growth.
Instead of consumers benefiting – and banking the savings – from reduced energy costs due to technological efficiency, they frequently upgrade from small hybrids to “muscle” hybrids or drive further or purchase larger homes and televisions. Incinerating garbage is another technofix that does not encourage waste reduction but simply promotes waste proliferation.
Technological innovation can also create environmental nightmares. The practice of vacuuming the ocean floors to produce cheaper fish has wiped out the breeding stocks of countless species. Likewise, aquaculture is decimating salmon stocks. And are we not unleashing uncontrollable ecological problems by genetically engineering our food? We should always heed “the law of unintended consequences” when tinkering with nature.
Geo-engineering is the new buzzword for technology solutions applied to environmental problems, such as global warming. The proposed mega projects include carbon sequestration, seeding the oceans with iron filings and releasing sulphates and small mirrors into the upper atmosphere. There are no magic techno-bullets that will reduce our over-sized footprints. Behavioural changes, such as modifying our lifestyles and conserving resources, are a more effective solution to the ecological crisis than expensive and potentially dangerous technofixes.
The business community promotes technological solutions, not so much for environmental reasons, but for investment opportunities and to stimulate consumption and economic growth. Governments also encourage technological projects because they give the illusion of countering problems, such as global warming. Technofixes, subsidized with tax dollars, are always more politically popular than restrictive regulations or encouraging lifestyle changes among the public.
We are living way beyond our means both economically and, more perilously, ecologically. Stimulating the economy with easy credit to encourage consumption and increase demand will simply accelerate the downward spiral of the natural world, taking the economy and our lifestyles with it.
Just one day after the equinox, the Global Footprint Network announced that the planet had slid into deficit. September 23rd was Earth Overshoot Day. In less than ten months, global society has consumed what it takes the planet twelve months to produce. For the rest of the year we will be dipping into our ecological reserves and borrowing from the future.
At the same time, in a series of reckless financial ventures and lavish compensation packages, the barons and brokers of Wall Street triggered an economic crisis. The contagion spread rapidly as stock markets imploded around the world. Billions of dollars of investments and retirement savings vaporized, severing the social contract between Wall Street and Main Street.
Balance and equilibrium vanished overnight. Both balance and equilibrium are cherished terms among economists and also fundamental foundations of ecological stability. In addition, they are essential pillars of a cohesive society. In the midst of the financial storm, environmental concerns among the public predictably vanished as well.
Global finance or global ecology? Are we so blinded by self-interest and so captive to the traditional tenets of economic orthodoxy that we are oblivious of the indivisible relationship between the economy and the environment? Are we not aware that our consumption footprints far exceed the biocapacity of the planet? Do we not realize that economic recovery is only possible and sustainable if we first balance nature’s books?
Turmoil in the world economy, depletion of natural resources, pollution and the threat of global warming will soon confront us with fundamental questions and choices. Some of our iconic economic values and practices will undergo a seismic shift. These assumptions include easy access to resources, technology as environmental saviour, the magical role of the market, globalization and trade liberalization, as well as consumption patterns and economic growth discussed in the previous article.
A key concept in the study of economics is the notion of scarcity and how scarce resources are allocated among competing interests either by market mechanisms or government planning. The emphasis on scarcity may be misleading, however, since not all resources are scarce.
Food is an example of an abundant, renewable resource where market based solutions have failed. The problem with food shortages is inequitable distribution and price fluctuations, often related to hoarding and speculation. In addition, government subsidies for products, such as corn-based ethanol, exacerbate food shortages. Tragically, half the food produced in North America is wasted. Squandering food while millions in the world starve is a moral issue, not a market problem.
Oil is a non-renewable resource and it is scarce. Production has peaked at about 88 million barrels per day. No matter the present gyrations of oil prices – due to speculation, shortages, and now, recession – the era of cheap oil is over. In a feeding frenzy that will last about two centuries, we will have depleted a resource four hundred million years in the making – with nary a concern for the energy needs of future generations.
An early casualty of scarce and expensive oil will be globalization. International tourism will plummet, except for a wealthy elite, as recreational flying becomes prohibitive. It is not only highly refined aviation fuel that will become expensive, but even the lowly bunker fuel used by freighters. Bunker oil is also the dirtiest fossil fuel after coal.
No longer will it be possible to ship fish caught off Newfoundland to China for processing and then import the same fish as frozen fillets. No longer will we be flying flowers and asparagus in from South America overnight. The escalating costs of importing cheap consumer goods from China will bring new life to the rustbelt of North America as plants reopen and domestic production gears up again.
The decline of globalization is already underway as the terms of international trade start changing. At the recent Doha round of the World Trade Organization talks, the developing countries made it clear that they would no longer be the dumping ground for subsidized food and electronic waste from the developed world. When we dump cheap corn on Mexico and drive farmers off the land, do we not understand why we get a flood of illegal migrants in return? Trade, after all, is a two way flow.
The theory of comparative advantage which was the basis of international trade for three centuries has become distorted. No longer do nations trade largely on the basis of geographical advantage, such as importing bananas from tropical areas. Modern trade routes have been shaped by the exploitation of cheap labour, the location of international garbage dumps, inexpensive transportation and the lightning speed of global capital flows.
Ironically, trade liberalization that has been largely driven by wealthy countries may be reversed by the same countries. The Obama administration will likely introduce a new era of protectionism by reopening NAFTA. Growing concern about global warming could lead countries to impose carbon tariffs and punitive sanctions on products from polluting countries, such as tar sands oil from Alberta.
The moral justification for globalization that it will raise the prosperity levels in the developing world is largely fraudulent. The “trickle down” theory of wealth distribution and the analogy of a rising tide lifting all boats simply do not hold water. Globalization has benefited the developed world and the elites in the developing countries – the only boats to rise on the tide of prosperity are the yachts of the wealthy.
To modify the metaphor, a more sinister tide is the rising “red tide” of toxic algae blooms that threatens to engulf the planet. Unfettered globalization, generating ever more consumption, is environmentally destructive and ecologically unsustainable.
Indeed, we do have a moral responsibility to raise the living standards of all impoverished people but it can only be achieved by reducing our own expansive footprints, not by exporting our ruinous consumption practices. Wealth must be redistributed in an environmentally benign way, such as improving education, health, nutrition and gender roles.
Technology is a double-edged sword in the environmental battle. While it improves the efficiency of resource use, it can discourage conservation and actually increase consumption rates, as well as spawning a range of negative side effects.
William Jevons pointed out 150 years ago that improved efficiency in the use of coal due to technological innovation actually increased the demand. The “Jevons Paradox” is used to explain how technological progress, by reducing the cost of energy, can increase its consumption and drive environmentally destructive economic growth.
Instead of consumers benefiting – and banking the savings – from reduced energy costs due to technological efficiency, they frequently upgrade from small hybrids to “muscle” hybrids or drive further or purchase larger homes and televisions. Incinerating garbage is another technofix that does not encourage waste reduction but simply promotes waste proliferation.
Technological innovation can also create environmental nightmares. The practice of vacuuming the ocean floors to produce cheaper fish has wiped out the breeding stocks of countless species. Likewise, aquaculture is decimating salmon stocks. And are we not unleashing uncontrollable ecological problems by genetically engineering our food? We should always heed “the law of unintended consequences” when tinkering with nature.
Geo-engineering is the new buzzword for technology solutions applied to environmental problems, such as global warming. The proposed mega projects include carbon sequestration, seeding the oceans with iron filings and releasing sulphates and small mirrors into the upper atmosphere. There are no magic techno-bullets that will reduce our over-sized footprints. Behavioural changes, such as modifying our lifestyles and conserving resources, are a more effective solution to the ecological crisis than expensive and potentially dangerous technofixes.
The business community promotes technological solutions, not so much for environmental reasons, but for investment opportunities and to stimulate consumption and economic growth. Governments also encourage technological projects because they give the illusion of countering problems, such as global warming. Technofixes, subsidized with tax dollars, are always more politically popular than restrictive regulations or encouraging lifestyle changes among the public.
We are living way beyond our means both economically and, more perilously, ecologically. Stimulating the economy with easy credit to encourage consumption and increase demand will simply accelerate the downward spiral of the natural world, taking the economy and our lifestyles with it.
