It’s September, 2014. In another week, there will be thousands of academics, diplomats, lobbyists and pundits converging on New York for a United Nations emergency session Climate Summit. Unfortunately, they’ll all be arguing about the wrong topic. As a pseudo Eco-Economist, I feel compelled to shout:
“It’s the Economy Stupid! – Not the Environment.”
I know. I plagiarized the title. But it cuts straight to the point. That’s not in vogue anymore. We’re supposed to be politically correct so as not to offend anybody. We tend to defer to so called experts while we snack on digestible sound bites, lacking in substance.
Leading up to this Climate Summit, Burger King has found itself in the cross hairs as the latest scape goat as the latest scape goat in this chronically superficial assault on unsustainability. The headlines read: “Burger King’s plan to merge with doughnut chain Tim Horton’s in Canada may be a bad sign for Southeast Asia’s rainforests.”
The reason we haven’t solved our environmental problems is because we have environmentalists working on solutions to what is fundamentally a systemic economic problem.
As if the merger changes anything with regard to their use of palm oil or the impact the two companies are already having independently on the environment.
We point fingers at Burger King because it means we get to side-step our own personal responsibility in the matter. Politicians and Economists like to point the finger at Burger King because they don’t have to deal with the deeper systemic problems that underlie the broader issues – for which they are culpable. Environmentalists like to point the finger at Burger King because they’re a big target and the headlines bring in big donations.
There’s a lot of snack-talk today about Climate Change, Environmental Footprints, Deforestation, Sustainability and Inequality. But, I prefer simple straight-forward talk. It reveals the true nature of things, more than the fancy-speak of talking heads.
I find it utterly dumbfounding, not to mention infuriating, that so many supposedly great minds have perpetuated the climate change and sustainability debate and yet there is still no honest statement of the problem and therefore, no hope of a clear solution. This is a classic example of diagnosing a symptom and not its cause.
I am the Founder of an organization called InfiniteEARTH. We save rainforests. Specifically, we save peat swamp forests on the island of Borneo in Indonesia, one of the most endangered ecosystems on the planet and home to the dwindling population of endangered orangutans. After 7 years of hard work, we won the right to protect and manage nearly 65,000 hectares (162,500 acres) of Indonesian rainforest, all of which was under imminent threat of slash and burn conversion to palm oil plantations. You could fit most of
Singapore inside our forest reserve, called the Rimba Raya Biodiversity Reserve.
From that description, you might make the forgivable assumption that I am an environmentalist. But, I am not. Truth is, I’m not sure what an environmentalist really is, but I don’t think I’m one of them. Not really. The reason we haven’t solved our environmental problems is because we have environmentalists working on solutions to what is fundamentally a systemic economic problem. Carbon Neutral & Sustainable Are Simply Not Enough I am many things. I’m an economist by education, an entrepreneur by default – since I am fatally allergic to the bureaucratic quagmire of politics, corporations or NGOs. I am an adventurer, a naturalist and most importantly a father.
But what I really am, if you peel back the labels, is an insatiable glutton, a financial fraud, an addict and a thief, to the extent that I steal from my children to fund my addictions. I am… just like you. It was the eventual realization of this long list of shortcomings, as a species, that led me to create InfiniteEARTH.
So, you see, InfiniteEARTH wasn’t created to save the rainforest in Borneo per se, even though that’s what we do. InfiniteEARTH’s Rimba Raya Biodiversity Reserve was meant to create a living, working example of how we can correct the underlying cause of a chronic economic problem, not put a band-aide on an environmental consequence. At the risk of sounding dramatic, it was created to provide restitution for an economic crime.
Our real problem is CREDIT. CHEAP, EASY CREDIT. Our current extractive economic model is based on credit. And we like it that way because it subsidizes our value meals at Burger King, the price of which accounts only for the cost of cutting down the forest for palm oil and pasture land, not for the environmental costs of replacing what was lost. But with this purely extractive cost model, we have all conscripted our children into debt slavery.
We are borrowing from our children’s futures to subsidize the cost of goods and services we consume today..
As with everything else about our modern global economy, we’ve kicked the can down the road, leaving our children to pay for our unsustainable lifestyles. That has to stop – immediately. But, I don’t have any illusions that it will. We are biologically
programed to consume – gluttonously – a genetic leftover from thousands of years of food scarcity prior to the agricultural revolution. Our brains have not yet caught up to the reality that we do not have to gorge ourselves in fear of not knowing when the next meal is coming. Unfortunately, by the time our brain’s biology adapts to this fact, we’ll have depleted the Earth’s resources and broad scarcity will be the norm once again.
No amount of social conditioning alone will overcome this biological predisposition quickly enough to save us from the veritable cliff we’re headed for. So, at the very least, we have to start paying for the replacement costs of what we consume. That is the most profound reality of our time.
Therefore, the conversation we need to be having, post haste, is how we embed environmental replacement costs into everything we consume, so that we don’t leave our children environmentally bankrupt and enslaved. This is not a political issue or an environmental issue and it’s not about Burger King or Tim Horton’s. This is undoubtedly an economic issue; but even further to its core, this is a moral issue.
We are living in a period of abundance and mass consumption unequaled in the course of human history. We currently consume at a rate of 1.5 times the earth’s capacity to absorb our waste and regenerate the resources we’ve consumed. By the year 2050, when our population reaches 9 billion people, we will need the equivalent of two Earths to support our insatiable demand for natural resources.
In a shameful frenzy to satisfy our insatiable appetite for mass consumerism, we are climbing up the backs of our children and short selling their futures. Our legacy and their inheritance is that we have left them environmentally bankrupt and financially enslaved.
The ongoing financial crisis and the chronic economic bubbles that precede them, are a result of the broader reality that everything we consume is highly leveraged, with the real total cost of ownership being far greater than its current price reflects. By paying only for the extraction costs of our non-renewable natural resources and not their full replacement costs, we are borrowing (stealing) from our children’s futures to subsidize the cost of the goods and services we consume today.
Just since the inception of InfiniteEARTH’s Rimba Raya project some six years ago, the world has lost 90 million
By the year 2050, when our planet’s population reaches nine billion, we will need the equivalent of two Earth’s to support our insatiable demand for natural resources.
hectares (220 million acres) of tropical bio-diverse forest, an area three times the size of Norway, slashed and burned and replaced with palm oil plantations for the production of packaged cakes, cookies, candy and crackers or cleared for cattle grazing for the production of fast food hamburgers.
For these frivolous things we have stolen from our children’s futures and for the first time in modern history we have condemned the next generation to a lower standard of living than our own.
Because of this simple fact, our extractive economic model simply doesn’t work anymore. Our environmental problems are the result of a chronic underlying economic ailment.
Launching clever campaigns to convince people to reduce, recycle, reuse, and repurpose is terrific, but it alone won’t solve the problem when half the planet is just beginning to consume and the population is set to double in span of my children’s lifetime. Tying ourselves to trees and standing in front of the bulldozers makes great news and calls attention to the problem, but does nothing to address the underlying causes. We need to be discussing the causal effect that our extractive economic model has on our unsustainable consumptive behavior.
Our current extractive economic model has existed since the dawn of mankind. We extract from nature’s bounty and we consume. Nature replaces what we consume. And the cycle continues. For some 10,000 years of human history, this model has worked. Nature’s incredible abundance and productivity always managed to out-produce what the world’s population consumed.
And then came the Industrial Revolution. That spurred an increase in consumption levels, the standard of living and a dramatic rise in global population. Sometime in the early years of the nineteenth century, the world’s population reached 1 billion.
My grandmother was born a century later in 1917, in the heartland of America. She is still alive today and at age of 97, she has seen the world’s population increase four-fold – all in the span of one person’s lifetime. My grandma’s family was poor – like most people in that era. Their standard of living was the rule, not the exception. When she was a child, my grandma was lucky to have one pair of shoes and one winter coat. She walked six miles to school – yes, in the snow and uphill both ways. She shared a single bed with 3 other siblings. Her family heated their modest home (that her father built himself) with the cast iron stove in the kitchen.
Today, she still lives modestly and well within her means. She is, after all, a product of the Great Depression and WWII. After a lifetime of never making more than $4 an hour at a department store and raising five kids, my grandma and grandpa somehow miraculously retired with a comfortable amount of savings that defies the laws of finance and is worthy of a Harvard Business School case study. She has outlived my grandpa by more than a decade and now lives alone. Her house is paid for and she lives on an $800/month social security check. Even at that, she still manages to put some of it aside for a rainy day. That kind discipline has never been seen in any generation since.
Her lifestyle today, however, far exceeds that of even the wealthiest people of her childhood. Today, she lives in Florida, has a car and a house three times the size of the one she grew up in. She has a closet full of clothes, a dishwasher, a microwave, central heat and air-conditioning. She goes out to eat – often. She still travels – by airplane. She spoils her great-grandchildren with too many Birthday and Christmas gifts.
My grandma is not alone. The other seven and a half billion people with whom she now shares this fragile planet, have the same things, many have more, and the rest want what she has. And that means there are going to be a lot more Burger Kings and Tim Horton’s, not because they’re evil, but because we consumers keep craving what they’re offering, all the while passing the bill to our children.
To make matters worse, instead of addressing how we embed environmental replacements in the cost of everything we consume, environmentalists have only exacerbated the problem by focusing on corporations and giving the consumer a free pass. To be fair, that’s probably because we don’t donate to people who tell us we’re part of the problem. Or, maybe because they’re also consumers and that means confronting their own personal responsibility. Some of them even say that paying for environmental replacements is akin to a sin tax, which means it’s better to do nothing I guess. We conveniently carry out this endless debate inside a house of mirrors, where blame is deflected in a dozen different false directions.
We all really need to start being honest with ourselves and with our children.
My daughter’s birthday is coming up soon. She’ll be twelve. I’d like not to feel like a hypocrite when I give her the present I bought for her, knowing that I bought it on credit that she will have to repay. I’d like to be able to tell her that she and her little brother will have a better standard of living than I had, that things are getting better, not worse. I’d like to be able to say I did everything I could to make sure that’s true. But I can’t. Today, I’m still a liar and a thief. And so are you. Today, I still steal from their piggybanks to pay for my cravings. And so do you. Today, things are not getting better. I hope that will change. But, for that to change, we have to change the narrative.
We have an economic problem that is causing irreparable damage to this planet and threatening the survival of mankind. One of the most efficient and most immediate ways to begin correcting that, is to start paying for the total replacement costs of the natural resources used in the things we consume, not just for their extraction costs.
It’s the Economy Stupid! Is there an economist in the house?