the coming debt crisis

I’m worried about the debt we’re accumulating. I think that we are going to leave our children so far in the red that they may never be able to get out from under our obligation. And I worry about this more and more as time goes by and we do nothing to solve it.

Yeah, the environmental debt we are leaving for future generations is a big deal to me.

Oh, sorry, did you think I was talking about monetary debt? No, I’m not nearly as worried about that. That kind of debt spending is intended to spur an economic recovery, and as the economy recovers we are (hopefully) earning money back on the debt incurred.

An environmental debt, however, is a much different thing. As I mentioned in my post on “responsible consumption” the other day, the Global Footprint Network estimates that it would require 1.5 Earths to sustain our current rate of consumption indefinitely. By overconsuming now, we will have to consume less later to put the Earth back on a path to sustainability.

This is especially troublesome because, unlike monetary debt, the environmental debt that we are accumulating now is only serving to decrease our ability to repay our obligation later. Because we as a society refuse to acknowledge the accumulating debt, we continue to invest technologies that only increase the rate at which our debt accumulates, rather than shifting our efforts towards developing technologies that will slow or maybe even reverse our current trajectory. It’s like a failing business investing in an Xbox for the office: it might keep the employees happy now, but the long-term effect will be to reduce productivity even further and make it harder to cover your debts.

If only Republicans and Tea Partiers would be as vocal about this environmental debt as they are about the fiscal debt, we might see some progress on it. Or maybe if Democrats could be vocal about it (or anything, for that matter), it might get some attention. Instead, we’re just silently accumulating this debt, pushing a growing problem off on to future generations. I’d like to believe that technological innovation will be our savior in the long term, but we’re making it harder with every year that passes and we fail to change the status quo.

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5 Responses to the coming debt crisis

  1. RS says:

    Some random thoughts:

    1. I don’t think our current way of life is unsustainable. I think humans are past the point where we’ll be restricted by limited resources. When we’re done with this earth, we’ll find another one. It’s not something I’m terribly excited about — I don’t think we should do anything “indefinitely”. I don’t get the obsession with protecting our future generations. As awesome as we are, I believe that a better species will come along if we all die. Probably not going to happen any time soon though, and definitely not going to happen because we run out of resources.

    2. That said, I’m still for responsible consumption, only because it’s irresponsible to consume so much when there are millions (living right now, not in the future) who don’t have as much as we do.

    3. You mentioned that it would be a mistake for a failing business to invest in an Xbox to elevate employee morale. Do you believe that any such investment will always result in long-term loss of productivity, even for a successful company?

    • RS,

      I think it’s a bit unfair to argue our way of life is not unsustainable, citing future technological innovations and discovery of new, life-supporting planets as solutions to today’s problems. (Although, Julian Simon would disagree: http://en.wikipedia.org/wiki/Julian_Simon).

      And the “obsession” with future generation is not only part of the “human condition,” but the very definition of evolutionary fitness that got us and all other life on earth to where we are today. So perfectly reasonable, I’d contend!

      Further, the romanticization of our presumed successor species is probably, well… overly romantic. Generalist, fast-reproducting, adaptive/invasive species are rewarded with dominant status. Our unfortunate demise is unlikely to yield a wiser, more responsible successor.

      Your concern for how our consumption impacts our fellow contemporary humans is touching and well said. Speaks to an idea of fairness that is largely absent from most political discourse.

    • frouglas says:

      Re: #3

      I definitely don’t think that such an investment will always result in a long-term loss in productivity, and it’s certainly not a perfect comparison. I probably should have specified more: the company that I had in mind was failing due to low productivity. It’s that idea that I was trying to get at, that it makes no sense to invest in something that’s going to aggravate the problem (low productivity), because not only are you spending some of the capital you have now, but you’re also reducing your ability to meet your obligations in the future.

  2. We are way beyond sustainable and on our way to irreversible if we don’t literally stop what we are doing.

  3. Doug – do you think part of the solution is to roll up environmental debt into economic debt? We have a market economy that ignores the real cost of almost all products and services.

    Paul Hawken (http://www.paulhawken.com), among others, has proposed abandoning income taxes in favor of user fees for everything. Not the most progressive tax policy, but could be effective in making the real cost of our purchasing decisions clear. Similarly, cost saving are achieved by minimizing environmental (and social, health, etc) impacts, rather than externalizing costs.

    What does the environmental economist have to say: Is there a way to address environmental debt (and for that matter, your “sustainable consumption”) outside of the economic system (social movements, transformational change, legislation), or must we work within the existing structure, using economic incentives and disincentives?

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