18 Aug 2011: Opinion

A Planetary Crisis Is
A Terrible Thing to Waste

There are striking similarities between the current economic and ecological crises — both involve indulgent over-consumption and a failure to consider the impacts on future generations. But it’s not too late to look to new economic and environmental models and to dramatically change course.

by christian schwägerl

While the economy and ecology are often pitted against each other, they share the same linguistic root: “Eco” is derived from the ancient Greek word, oikos, meaning house, or household. So both words refer to the art of managing or understanding the household — or environment — in which you live. These days, the linkage of the economy and ecology takes on new meaning.

The financial crisis that erupted in 2008 was driven by governments and consumers wildly over-spending, abetted by bankers and financiers who got rich doling out loans to people who often had little chance of repaying them. A bad loan is one where one or both sides don’t expect repayment and design ways to pass on the risk to somebody else, for example the taxpayer or central banks.

Bad loans are characteristic of how we treat the planet, too. In our global house, our ultimate central bank is the natural environment, with its treasure troves of water, wood, food, and hospitable climate. We’re taking
The Ponzi scheme of hyper-consumerism is approaching the equivalent of the Lehmann collapse.
out credits when we grow food, catch fish, or benefit from a climate system that meets our needs. Taking out sound loans would mean paying back interest in the form of sustainable management efforts, so the natural capital can regenerate. For example, it would mean catching only as many fish as can grow back in the ocean, logging only as much rainforest as will regenerate naturally in a certain time, and adjusting consumption of fossil fuels so we stay within safe limits for CO2 levels in the atmosphere. It would also mean investing heavily in green technologies.

But our current system of managing our environmental household is all about designing bad loan schemes to defraud nature’s central bank and passing on the debt to future generations. In order to exploit the natural world, we have rigged accounting rules and ignored the financial and ecological value of intact ecosystems, biological diversity, clean water, and many other forms of the planet’s natural capital. This has actually worked for some decades and created Western wealth as we know it.

But the Ponzi scheme of hyper-consumerism is approaching the equivalent of the Lehman collapse in 2008. Ecologists tell us that humans are consuming natural resources at a scale and speed that 1.3 planet Earths would be needed to sustain it, and that it would take four to five planets if all the Earth’s 7 billion people wanted to live like the West. With more ecological problems building up, it’s time to pay the bills ourselves, rather than fobbing them off on children.

One example is per capita CO2 emissions. German Chancellor Angela Merkel, a conservative politician, has just publicly endorsed calculations
Living off money that does not exist and living off non-renewable resources are aspects of the same problem.
by the Potsdam Institute for Climate Impact Research that show how much we overdraw our global CO2 budget. According to the institute, beginning today the average human being must not emit more than 2 tons of CO2 per year in order to avoid dangerous global climate change. But the average Chinese citizen is emitting 4 to 5 tons per year, the average German 11 tons, and the average American more than 20 tons. That means we’re overdrawing our CO2 budget by a factor of 2 to 10.

Living off money that ultimately does not exist and living off natural resources that are non-renewable are two aspects of the same problem. Shopping with money taken out on credit cards has long been a way of life in the U.S., which has led to a spendthrift attitude toward resources. Buying big SUVs or second cars that emit large quantities of CO2 are telltale symbols of living beyond one‘s means.

In 2008, three renowned biologists, including Simon A. Levin from Princeton University, published an article in Nature entitled “Ecology for Bankers.” They argued that “(t)here is common ground in analyzing financial systems and ecosystems, especially in the need to identify conditions that dispose a system to be knocked from seeming stability into another, less happy state.” The recent bailout programs have shown how difficult and expensive it is to push the economy back to a happier state. But natural ecosystems are much more complex and difficult to restore. For rainforests, oceans, and the global climate system, bailout programs will be much more costly — if they are possible at all.

A truly disheartening consequence of the current financial crises in the U.S. and Europe is how our profligacy is sucking up money needed to empower the younger generation. Schools, vocational training programs, universities, biomedical research institutions, green-tech companies, and environmental regeneration projects need their budgets to grow in order to
People living beyond their means effectively force future generations to live below their means.
keep up and finally get ahead of the wave of problems we face. Yet the opposite is occurring. People who have been living beyond their means by excessive consumerism and excessive profits now effectively force future generations to live below their means. Denying these young people the necessary access to education, science, and green technologies will undermine the power of the U.S. and the European Union in tomorrow’s world. I keep wondering why the younger generation is not more vocal in the current crises, protesting against the attack that is currently being waged against their future.

So what might be a positive perspective for our planetary housing and banking crisis? I think the current situation could act as an eye-opener, forcing people to ask deeper questions and reject solutions designed to work just until the next election. The demand for an economic model beyond the boom-and-bust cycle of bad loans is growing. Such a model would have to value education and research much higher than today and put a price on carbon emissions and ecosystem services in order to make sound loans from nature’s central bank the new normal. It would need to create wealth through hard work and innovation, rather than speculation and credit cards.

You can see examples of positive developments in many places. Increasingly, people are seeking happiness and satisfaction from sources other than oversized cars and houses, overly sugared industrial food, and an overkill of new electronic gadgets. This is a very healthy reaction from individuals. But politicians and managers need to act, too.

In my home country, Germany, the federal and state parliaments have enacted legislation that will ultimately outlaw new government debt. At the same time, Germany is sharply increasing state spending on research and is striving to cover half of its electricity needs from renewable sources by 2030.


Germany’s Unlikely Champion
Of a Radical Green Energy Path

Germany’s Unlikely Champion Of a Radical Green Energy Path
The Fukushima disaster convinced German Chancellor Angela Merkel that nuclear power would never again be a viable option for her country. Now, Christian Schwägerl reports, Merkel has embarked on the world’s most ambitious plan to power an industrial economy on renewable sources of energy.
Many other nations, including South Korea and Costa Rica, are rethinking their economic models, too, in order to ensure that prosperity does not mean the impoverishment of natural richness and ecological capital. But in order for that to happen globally, the rules of how business is done, and how money flows through the financial system, need to be changed — and fast. Fusing the “eco” in economy and ecology so that capital flows into green, durable, innovative and resilient investments is one of the greatest tasks ahead.

The saying that a crisis is a terrible thing to waste has never been more true. The crisis that erupted in 2008 has so far been wasted. Bonuses and high-risk credit are bouncing back to old heights, while the stability of entire nations is threatened by the resulting cost of bailout programs. On an even larger scale, managing the whole planet with bad loan schemes will not work either. Who in his or her right mind would risk wasting the current planetary crisis?

POSTED ON 18 Aug 2011 IN Business & Innovation Policy & Politics Europe North America 


Thought you might be interested in a recently published Book Review Perspectives on "The End of Modernity: What the Financial and Environmental Crisis is Really Telling Us" from Sustainability: Science, Practice, & Policy


Posted by sustainability: Science, practice, & Policy on 18 Aug 2011

Great post

Posted by Amy on 18 Aug 2011

That was a wonderful opinion piece. I find it incredible how some developed countries have their head so deeply "in the sand" about climate change and other environmental impacts of consumerism (Canada and the US for example) while other countries are making sound policy based on science and reacting to the tragedies around them.

Posted by Jocelyn Plourde on 18 Aug 2011

Do you know why we are not more vocal ? I will tell you. I have been demonstrating extremely peacefully in copenhagen and got finally detained 8 hours with handcuff sitting in rows in the cold and without the possibility to urinate. This is what happens if you are vocal in the street.

Otherwise, there is no means of expression. The access to public speech is centralized, coming from top (the media) to the people. You can always express your opinions, nobody cares, we are powerless.

There are two places were we can speak out and were it makes a difference: the street and the worplace. The street, you have to follow organized demonstration where official leaders talk in your name. If things go a little bit out of the agenda, the police stops the all thing. In many "democratic" countries, like france, there are special laws to limit spontaneous gathering in streets. Very far from the forum ideal of Athens republic. Security first !

The other place is work, where you spend more than half of your awake time. If you speak out, with the type of contracts we get today, even if we have a ph'd, we do not get extensions. Never before bosses have had so much powers and the intelectual freedom been so low in places like universities. Better agree with everyone and keep a low profile.

In the end the risk is that the society will polarize, with very violent uprise and extremely harsh repreion which will precipitate the collapse. May be this will not be a good outcome for economy, but certainly a good one for the environment.

Posted by kervennic on 19 Aug 2011

"German Chancellor Angela Merkel, a conservative politician, has just publicly endorsed calculations that show how much we overdraw our global CO2 budget"

This is quite a joke, to say that Angela Merkel is a Conservative politician. Wikipedia says, that the CDU, Merkels'party, is generally regarded as centre-right in the German political spectrum. That of course means considerably to the left in terms of, say, the US. She was raised in East Germany under Communism.

She has not renounced nuclear power for any scientific reason, but for political reasons because of the hysteria produced by the Japanese tsunami. Germany is reverting to coal, rather than embracing "green" technology.

Posted by Harbinger on 19 Aug 2011

It's great that you say: "I think the current situation could act as an eye-opener, forcing people to ask deeper question". I only hope so. It'll take some wide open thinking, though. See my blog [www.synapse9.com/signals] and below.

The curious evidence is that each time a human complex society has reached its growth limits it "ran into problems it could not solve" and disintegrated. Rome and the series of climax Mayan civilizations are examples. That problem has never been solved.

What we need to ask is why our brilliant self-interest problem solving culture adopts policies that are profoundly self-defeating. How DO we get a global consensus economic policy to accelerate the use of declining resource as a way of sustaining prosperity??? Sentences that very explicitly mean that can be heard coming from our leading economists, politicians and intellectuals every day. Nearly any sentence including the word "growth" in fact.

I think the cause is that they are not thinking about the physical processes of the natural world their words refer to. I think they're all speaking about the cultural affirmation their own social network assigns to the words they use.

Anyway, I have a lot of really good work to share on this problem, and how to solve it if you could persuade more people to use words to refer to natural processes rather than to only our cultural values. Not doing that is where our expert mistakes seem to be coming from.

One other glaring example is provided in a short article I have in the current New European Economy. From a physical world view the continuing world commodity price spiral and food crisis began about 2001 and was caused by the world economy as a whole running into the natural limit of adequate supplies to recover from random price shocks. By far the most popular theory is that the world commodity system suddenly stopped being able to recover from price shocks because of bad weather!! How's that for scientific thinking?

A decisive moment for Investing in Sustainability http://www.synapse9.com/pub/ASustInvestMoment-PH.pdf

Posted by Phil Henshaw on 19 Aug 2011

Great Post. Congratulations for your in depth analysis on the subject.

Dr.A.Jagadeesh Nellore(AP),India
E-mail: anumakonda.jagadeesh@gmail.com

Posted by Dr.A.Jagadeesh on 20 Aug 2011

Well-written post, thanks.

There are several issues of interest here beyond the fine description of how we discount our future.

The issue I'd like to reflect on, which is implied in the title, is how do those who clearly see this problem of future discounting, irresponsible financial, and destructive environmental behaviors convince the majority of citizens and decision makers that we need to change our behaviors? Why have we not been able to take advantage of the crisis to foment the necessary change, especially in places like the USA?

As a USer who has lived in Germany and who presently lives in Costa Rica and works in environmental and sustainability communications, I can see that we have failed to capitalize on crises consistently and have not at all effectively communicated the values that Germany and Costa Rica are starting to embrace. We are losing the communications battle, big time. We have not been able to properly deliver messages about belonging vs. belongings, about quality vs. quantity, and mostly, we have failed to communicate to people that we have common responsibilities towards one another, towards future generations, and towards the other members of our biotic community.

The media and advertising communities, which are focused on consumerism and business as
usual are winning the battle for values. The values are all about what an individual has,
especially compared to the next individual. These values are divisive and have served to promote exclusivism and greed.

Among all the initiatives to green things, use renewables, consume less, and reform our
economic system, a vital initiative is to transform the way we think of each other, the planet, future generations, and other species. We need to embrace care, universal responsibility, and a deep sense of belonging to the larger community of life on Earth.

Check out the Earth Charter, it's a good first step.


Posted by Douglas Williamson on 21 Aug 2011

In this country, the USA, I have felt for some years that a "fix" for the problem of banks lending to homeowners who have little likelyhood of repaying is relatively easy - if the authorities would move: make banks retain at least 25% of all the mortgages they make, instead of shipping 100% to Fannie Mae and Freddie Mac. Keep serious "skin in the game". Bad loans would decrease immediately.

I do not see such an easy fix for the environment because the consequences of current "borrowing" cannot be made to affect the "borrower" who will be long gone before these consequences will be felt.

Posted by Harold Talbot on 21 Aug 2011

I am always surprised that so few people see the obvious logic of these arguments: The economy is embedded in the ecosystem; thus, if the ecosystem fails then so will the economy.

Unfortunately, most people do mostly what they see their family, friends, and neighbors doing, not what cold logic would dictate, so it will take some while for things to change.

Perhaps things will change fast enough to solve these problems in time, and perhaps they won't, but, in either case, social policy will change only incrementally as each individual person becomes convinced the change is necessary and reasonable.

It will not, and given human nature, it cannot happen abruptly, unless there is a big disaster that provides overwhelming evidence of a problem. However, big disasters in this case will usually mean we are acting too late, so we need to hope that gradual change will be fast enough to avoid all disasters.

Posted by Dave Johnson on 22 Aug 2011

I had to laugh when I read your first paragraph, as I named my company - Ecomergence - based on that perception, back in 2008 - essentially asking the question "what is so good about waste, anyway?" Sustainability makes sense from both the economical and ecological perspectives. My hope rests in emergence and community, the other two inspirations for my company name. I have despaired at the lack of leadership and failure of our institutions, so I look to our communities and to bottom up solutions that spread through viral adoption, in the absence of leadership. Let's keep our fingers crossed that humans are part of nature too and that nature ultimately takes care of itself, finding ways to reset harmony when it gets out of balance.

Posted by John Cooper on 22 Aug 2011

Absolutely right. Great article!

Though, in my opinion, this crises will not yet be the one that will open our eyes to the global eco/nomical/logical problem. Actual politicians and economists don't have enough informations, studies, or culture to understand the world as a living being. We will have to wait two or more generations for human kind to produce more leaders that really care and understand the world they live in.

Let us have trust in actual ecologists, teachers and journalists to educate our children. Hope we have enough time...

Posted by Ana Barros on 23 Aug 2011

Really great piece Christian.

My only hope is that all above correspondents are doing their personal bit to try and redress the state of the planet.

This writer lives with a partner in an 81 sq metre home, about 7 star rated, 7 metres of north windows receiving all that wonderful solar heat, with a 10,300 litre water tank, a dry composting toilet, 1000 watts of PV and no electricity bill for 3 years.

Grow many of our fruit and vegetables on a 389 sq metre block of land. Preserve, make chutneys, jams, preserves, bake our own bread, no purchase of processes foods and are part of the 1000 watt society.

You too can do it. We're aged pensioners.

Posted by Grace McCaughey on 26 Aug 2011

Brilliant! Yet the mystery remains. Why can't we ever so smart human beings see that a finite planet means finite growth?

Posted by Chris Chatteris SJ on 26 Aug 2011

Someday, perhaps, civilization may realize that unregulated, kleptocratic, crony capitalism enabled by legal graft and based (not on gold but) on "black gold," Texas Tea, that is, on coal and hydrocarbons of fossil "fuels" is much worse than the resulting boom and bust cycle.

These fossil materials are defined by capitalist economics as "energy." Mother Nature defines them as matter, as in "the three phases of matter." A civilization that does not understand the difference between energy and buried matter located in the lithosphere may be a collapsing civilization, one based on explosives, one based on elementary deception.

Some kind of social democracy that allows truly regulated "free market enterprise," rather than the current corporatized system, seems a better choice for transformation to sustainability, and maybe even peace.

Posted by James Newberry on 26 Aug 2011

Not a word about the defects of Capitalism here relative to the world's environment and ecology, the need for the capitalist system to constantly grow and increase profits in the business sector on a finite and now probably overpopulated earth. I would strongly recommend the book by John Bellamy Foster and Fred Magdoff entitled "What Every Environmentalist Needs to know about Capitalism."

Posted by Morton Brussel on 02 Sep 2011

Christian, thank you for writing this very insightful and informative piece. I have been very vocal for the past 10 years about consumerism converting to an "Eco-minded" approach (ecology + economics = reducing individual footprint).

After working many years marketing for architectural firms, I can honestly say I have seen all you've outlined (loans, cheap developers, marketing minions, building beyond our means) first-hand and it has disgusted me into fighting for an eco-minded system. There's no turning back to the sadistic system that is obviously ripping at the seams.

We need to switch from the currently flawed GDP to the Genuine Progress Indicator (GPI) which includes social and environmental resources when measuring economic growth.

And I'm amazed how many "environmentalists, etc." have not read "Small is Beautiful" by E.F. Schumacher (1973) "a study of economics as if people mattered." The energy crisis in the '70's was a warning sign of future issues to come. The signs were ignored, we all went on to measure prosperity via GDP, and even to this day people brush off the prospect that there will NOT be a tomorrow if we don't start today...today possibly being too late to remedy the environmental damage at the expense of manufacturing inferior products (as well as SUV and 2nd car consumption).

As you mentioned
"I keep wondering why the younger generation is not more vocal in the current crises, protesting against the attack that is currently being waged against their future."

As a writer, I tried to tackle this via an eco-minded series (http://www.igrad.com/articles/tagged/?eco-minded) I fought hard for, but unfortunately with minimal results. The key is to fight the opposition for the attention of the mainstream -- we need this message to be strong enough to pull in the younger generation...there is power in numbers and change starts with the individual.

Thank you again for this article...it gives me hope to be able to find this source of logic via today's convoluted internet.

Posted by Sunny Shakula on 20 Sep 2011

With all the above problems, many people are now trying to live a simpler life avoiding all the trappings of accumulating status symbols. It is rather difficult to change lifestyle habits, so it may often take months or years to learn to live in a less materialistic way. The first step is to take a critical look at the things we have and what we need, and eliminating the excess. This is the sure path to creating a sustainable life to boost a sustainable planet.

Posted by John Smitki on 01 Oct 2011

The American Journal of Physiology has published the results of a study in which participants were allowed to eat high protein foods, while a second study group was given supplements equal to the recommended daily allowance. Surprisingly, the group that ate protein was the ones that lost the most weight.

Posted by Meal program on 31 Oct 2011

Comments have been closed on this feature.
christian schwägerlABOUT THE AUTHOR
Christian Schwägerl, who works for the German news weekly, Der Spiegel, is an environmental journalist who has reported on science and public policy for two decades and is author of the book The Age of Men, published in German under the title Menschenzeit by Riemann/Random House. In previous articles for Yale Environment 360, Schwägerl wrote about a unique nature reserve being created along the spine of Germany’s former Iron Curtain and about German Chancellor Angela Merkel’s unlikely push for renewable energy.



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