Saturday, October 01, 2011

Planet Earths' debt ceiling

You may have not noticed it amid all the news on the economy, but on Tuesday we've gone into ecological debt for the year. 27 September was this year's Earth Overshoot Day (via Discover), the day when human consumption and waste emission for the year has exceeded the Earth's annual productivity and ability to absorb waste. The organization responsible for this announcement is the NGO Global Footprint Network, which seeks to raise awareness of environmental sustainability. They've issued a media packet explaining the concept here (pdf). The idea was originally mooted by the UK-based new economics foundation (they do their name in lowercase) in the 1980s as Ecological Debt Day.

From Global Footprint Network website

It sounds like a straightforward calculation of income minus expenditure, but the reality of course is quite complicated. Most of the parameters, such as crop productivity and human greenhouse gas emissions, have to be estimated, so the date is not an exact one. Despite the uncertainties, the calculated date is actually be on the more generous (to humans) end of the scale.

What's scarier is that the date has been moving forward every year: from sometime in early November in 2001, to late September now, about 3 days a year. Even scarier, this ignores the cumulative effect of previous times when we've gone into debt. This crisis mirrors the financial one: in some heavily indebted countries, politicians are happy to report when they've simply slowed down the rate of debt increase.

This is a good way of getting people's attention, because of all the headlines that the poor economy has been grabbing lately. Even non-economists, like myself, have become acquainted with concepts like debt ceilings, defaults, and bailouts (though what a "tranche" is still remains opaque to me). Environmentalists and sustainability scientists are also working on figuring out how to put an economic price on ecosystems and the environment, to make the importance of preserving the environment more "real" to those who think in dollars and cents, such as policymakers and industry. Examples include factoring in the cost of ecosystem services into environmental impact assessments, or selling carbon credits, or swapping habitat protection for debt forgiveness. All of these schemes have their critics, but I like to think of them as experiments in progress, as people try to figure out what's a workable way to account for the environmental impact of our economic decisions.

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