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The Ecological Credit Crunch

Banks and the automobile industry have had the luxury of government bailouts, but what about Mother Nature? Who should be responsible for paying off the huge ecological debt that has accumulated over years of use and abuse of the world’s natural resources? The idea of an ecological credit crunch happening may seem far-fetched, but the truth is we are using up limited resources that are fast running out. We may not have much longer before an ecological credit crisis occurs.

Banks and the automobile industry have had the luxury of government bailouts, but what about Mother Nature? Who should be responsible for paying off the huge ecological debt that has accumulated over years of use and abuse of the world’s natural resources? The idea of an ecological credit crunch happening may seem far-fetched, but the truth is we are using up limited resources that are fast running out. We may not have much longer before an ecological credit crisis occurs.

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Ecological Debt

Ecological debt is defined as the excess consumption of natural resources over and beyond the earth’s capacity to regenerate. To determine ecological debt, the biological and physical capacity of an eco system is compared to the size of the ecological footprint to determine the rate of depletion. A credit or debit position can be established from this comparison and this represents an environmental debt or surplus.

Eco Debt Day, which predicts which day the world has used up its annual ecological allowance, keeps inching closer and closer. In 2006, it was 9 October. Last year it was 23 September. We are currently living off resources that should be set aside for future generations. For example, the United Kingdom has long exceeded its allowance of resources, and now imports the majority of its food and energy requirements. Imports of natural resources have been rising for five years consecutively.

The 2005 Footprint of Nations report by the UN shows that the global population is now so large that “the amount of resources needed to sustain it exceeds what is available.” We are living on borrowed time. The oil dependent nature of the global economy and the abuse of natural resources through deforestation and overfishing suggest that it may already be too late to return to a balanced use of resources.

Furthermore, the ecological debt that the developed countries have run up will affect the developing countries. Millions of people already disadvantaged by lack of access to land, sufficient food, and clean water, will find themselves saddled with an eco debt that they had no part in causing. There is a large disparity between industrialized countries and third world nations – nations in the West consume a lot more natural resources compared to Kenya, for example. With the growth of China and India, the developed world must curb their over-indulgence of resources as there is less of an ecological “overdraft” left over by developing nations than before.

Sustainable Living
 
Sustainability is the key to ensuring human life is preserved on earth. Drawing parallels to living within one’s monetary means, sustainability means living within the constraints of the global eco-system to ensure the continuation of life in the long term. Demand from industry and third world economies are consuming more natural resources that can be renewed. Studies have shown that this planet has been living off an ecological credit card for the last twenty years, with interest rates that none of us can afford to pay off.

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Why import if we can buy home-grown or homemade? Unnecessary trading wastes transportation costs and fuel. The UK imports and exports close to the same amounts of identical goods every year. For example in 2007, there were 1.8 million tonnes of essential oils and toiletries exported, and 1.5 million tonnes of the same goods imported.

Overfishing has already caused the global decline of blue fin tuna, a fish once so plentiful that it was the plat du jour for the Roman legions. Now the species hovers on the brink of commercial extinction. The level at which the fruits of the sea has been harvested in recent years may already have exceeded sustainability. The population of some species have fallen by 90 percent in 50 years, with the bulk of the surviving population made up of small juvenile fish. The rich stocks of fish of the past are now no longer viable.

It takes a tree in a rain forest hundreds of years to reach its full height in the canopy, but only minutes to fell it. Deforestation is one of the main contributors to eco debt. The Food and Agricultural Organization (FAO) states that roughly 13 million hectares of the earth’s green “lung” disappears every year, most of it in the Amazon. As rain forests disappear, so do entire eco-systems and the animals, plants and insects that each make up an integral part of the environment.

Saving Forests, Not Just Banks

The great recession of 2008 has eclipsed ecological concerns, already overshadowed by the more pressing concerns of energy generation, food shortages, political upheavals and civil wars. “Green” spending differs across nations, with South Korea unexpectedly leading the charge with 80% of GDP spent on green initiatives. The US spends 12% of GDP, falling just short of the international average of 15%. The UK, with its large ecological footprint, plans to invest only 7% of the economic stimulus package in green measures that would improve sustainability.

Ecological Effects

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Ignoring the ecological debt as it piles up will cause extreme changes on eco-systems and weather across the world. Natural disasters have increased by 70 percent between 2004 and 2006, most of them weather related. The hurricanes that ravaged the US, Bangladesh and Myanmar were all attributed to the effects of climate change. As temperatures and sea levels rise, there will be more extreme weather occurrences.

The effects of running up ecological debt in everyday tasks like powering the fridge, driving a car, or importing unnecessary food are cumulative and make a difference when viewed as a global aggregate. It may already be too late to start repaying the global eco debt, but if human society is to continue living on this earth, a concerted effort must be made towards sustainable living, and soon. Bankrupting the earth’s resources is clearly not an option for anyone. Unlike the world of finance, nature does not do bailouts.

About the Author:
JD Carr, CGB – is a serial entrepreneur and consultant with over 14 years experience building Internet and digital media businesses. JD is a Certified Green Broker® and specializes in commercial building sustainability and finance with Greenergy2030.com. A vocal advocate for environmental issues, JD writes and lectures frequently on the subject and is committed to helping entrepreneurs realize the positive goals their organizations can achieve through sustainable business practices.

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