Fri, Oct 17, 2008 - Page 9 News List

Credit crunch? Time to fix the nature crunch

The financial crisis at least affords us an opportunity to rethink our catastrophic ecological trajectory

By George Monbiot  /  THE GUARDIAN , LONDON

ILLUSTRATION: MOUNTAIN PEOPLE

This is nothing. Well, nothing by comparison to what’s coming. The financial crisis for which we must now pay so heavily prefigures the real collapse, when humanity bumps against its ecological limits.

As we goggle at the fluttering financial figures, a different set of numbers passes us by. Last Friday, Pavan Sukhdev, the Deutsche Bank economist leading a European study on ecosystems, reported that we are losing natural capital worth between US$2 trillion and US$5 trillion every year as a result of deforestation alone. The losses incurred so far by the financial sector amount to between US$1 trillion and US$1.5 trillion. Sukhdev arrived at his figure by estimating the value of the services — such as locking up carbon and providing fresh water — that forests perform, and calculating the cost of either replacing them or living without them. The credit crunch is petty when compared to the nature crunch.

The two crises have the same cause. In both cases, those who exploit the resource have demanded impossible rates of return and invoked debts that can never be repaid. In both cases we denied the likely consequences. I used to believe that collective denial was peculiar to climate change. Now I know that it’s the first response to every impending dislocation.

British Prime Minister Gordon Brown, for instance, was as much in denial about financial realities as any toxic debt trader. In June last year, during his Mansion House speech (the British prime minister’s big annual set-piece speech on the economy), he boasted that 40 percent of the world’s foreign equities were now traded here. The financial sector’s success had come about, he said, partly because the government had taken “a risk-based regulatory approach.”

In the same hall three years before, he pledged that “in budget after budget I want us to do even more to encourage the risk takers.” Can anyone, surveying this mess, now doubt the value of the precautionary principle?

Ecology and economy are both derived from the Greek word oikos — a house or dwelling. Our survival depends on the rational management of this home: the space in which life can be sustained. The rules are the same in both cases. If you extract resources at a rate beyond the level of replenishment, your stock will collapse. That’s another noun which reminds us of the connection. The Oxford English Dictionary gives 69 definitions of “stock.” When it means a fund or store, the word evokes the trunk — or stock — of a tree, “from which the gains are an outgrowth.” Collapse occurs when you prune the tree so heavily that it dies. Ecology is the stock from which all wealth grows.

The two crises feed each other. As a result of Iceland’s financial collapse, it is now contemplating joining the EU, which means surrendering its fishing grounds to the common fisheries policy. Already Iceland Prime Minister Geir Haarde has suggested that his countrymen concentrate on exploiting the ocean. The economic disaster will cause an ecological disaster.

Normally it’s the other way around. In his book Collapse: How Societies Choose to Fail or Succeed, Jared Diamond shows how ecological crisis is often the prelude to social catastrophe. The obvious example is Easter Island, where society disintegrated soon after the population reached its highest historical numbers, the last trees were cut down and the construction of stone monuments peaked.

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