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Book of the Day: Bankrupting Nature

photo of Michel Bauwens

Michel Bauwens
28th March 2013


* Book: Bankrupting Nature – Denying our Planetary Boundaries. By Johan Rockström and board member Anders Wijkman. Earthscan/Routledge, 2012.

This is a re-written version of the Swedish book “Den stora förnekelsen”, which was published in 2011. The book is an official Report to the Club of Rome.

Sturle Hauge Simonsen summarizes the topics addressed in the book:

“The human pressure on the planet is at a level where it poses a major risk for the future prosperity of society.

In a new book by centre director Johan Rockström and board member Anders Wijkman, they argue that this dilemma can only be addressed through a transformation of the entire economic system, including the financial markets. The system of quarterly reporting should be abandoned and financial institutions should be obliged to disclose their risk exposure in terms of high-carbon investments.

The new book is entitled Bankrupting Nature – Denying our Planetary Boundaries, (Earthscan/Routledge) and is a re-written version of the Swedish book “Den stora förnekelsen”, which was published in 2011. The book is an official Report to the Club of Rome, and was launched in Brussels at the European Parliament in December 2012.

“The challenges of sustainability cannot be met by simply tinkering with the current economic system”, Anders Wijkman says. He is a former Member of the European Parliament and has, among many other things, been Policy Director of the United Nations Development Programme. Today he is a member of the Royal Swedish Academy of Sciences and Co-President of the Club of Rome.

“We need a ‘circular economy’ that decouples wealth and welfare from resource consumption, and assigns a value to natural capital, so the depreciation of the earth’s resources and the loss of biodiversity are taken into account in national as well as company budgets,” Wijkman argues.

A recent review of the book in Nature says “Bankrupting Nature deserves our attention…. The book’s arguments are familiar but rarely have they been gathered together in one place to clarify the links between politics, economics and ecology.”

The new book provides a blue-print for a radically changed economic system that links economics with ecology. It argues that this is the only way to generate economic development in the future. A key element of such a new economy is to design industrial systems that recycle and reuse materials wherever possible and phase-out fossil fuels. This would be promoted through adopting binding targets for resource efficiency, increasing the taxes on the use of virgin materials and lowering taxes on labour, and a research policy that emphasises sustainable innovation and design.

“We need new business models such as moving from products to services or towards a circular economy based on re-use, reconditioning and recycling — all with the aim of facilitating sustainable development”, Anders Wijkman says.”

Bankrupting Nature has 12 key messages

1. Scientific evidence is overwhelming that human pressures on the planet have reached a point that poses major risks for future welfare and prosperity. Science indicates that we are transgressing planetary boundaries that have kept civilization safe for the past 10,000 years. Accelerating human activity is now the most significant driver of global change, propelling the planet into a new geological era, termed the Anthropocene. We can no longer exclude the possibility that our collective actions might trigger tipping points, risking drastic and irreversible consequences for human communities and ecological systems.

2. The sustainability crisis is manifested through social, financial, economic and environmental problems now playing out globally. We are faced with a set of serious challenges, driven by wasteful production and consumption, skewed trading and subsidy systems, and persistent and recurring financial crises. Gross inequities persist between nations, and inequality is on the rise within most countries. Unemployment is endemic and rising, particularly among the young. The financial system is divorced from the real economy and has failed to generate sufficient levels of investment into sustainability.

3. The concept of “planetary boundaries” provides us with a science-based framework that can guide us through the necessary transition to sustainability. We need to adopt a more holistic approach to human development. It is no longer possible to deal with one issue at a time.

Today´s – mostly vertical – approaches might give the impression that there is a significant degree of uncertainty within the scientific community. However, if we put “all our cards on the table” about the global environmental risks, the ‘risk panorama’ is much more obvious. Moreover, the critical interplay between the atmosphere, the oceans and the land-based ecosystems becomes a whole lot clearer. We need to develop a properly integrated, solutions-oriented science for global sustainability.

4. The aim must be to strengthen the planet’s resilience and its ability to continue providing a “safe space” for human development and wellbeing with respect to a number of critical issues, such as climate change, depletion of stratospheric ozone, biodiversity loss, changes in land and freshwater use and interference with nitrogen and phosphorus cycles, air pollution, chemical pollution and ocean acidification.

5. Climate denial can be explained in several ways. In order to counteract the strong vested interests and ideological and cultural barriers we must find new ways of communicating with the public to complement scientific facts and data, and to reach the people who disagree, despite the overwhelmingly-clear scientific evidence about the risks we are facing.

6. The Earth has had a remarkable capacity to buffer the expansion of human activities, allowing continual economic growth despite serious ecological decline. The economy is built on the belief that material consumption can expand indefinitely. However, science tells us that this is not possible given high and increasing pollution levels, collapsing ecosystems, climate change and resource constraints. De-growth is no solution either, as it would mean the collapse of our social, financial and economic systems. The growth dilemma can only be resolved by a thorough discussion about growth´s dilemma and a transformation of our economic system.

7. The short-term nature of both politics and the market system constitutes the greatest obstacle to addressing today’s serious threats to sustainability, as does the tendency to focus on one issue at a time. The financial crisis is not about money alone. To pay back all the debts will require substantial wealth generation, which can only happen with the help of major inputs of energy and materials. Prices for energy and most other commodities are on the increase, which will make the pay-off of debts more difficult. The only logical consequence is to apply a systems perspective – to merge the agendas of economics and finance with the agendas of climate and energy security, ecosystem decline and resource constraints.

8. To change course, priority should be given to the following:

replacing GDP as the main target of development;
taking nature into account, by assigning a value to ecosystem services and biodiversity;
implementing a tax reform: reducing taxes on labour and raising those on resource use;
removing all environmentally harmful subsidies;
using public procurement proactively for sustainability objectives;
rethinking the framework of the financial system in order to control the credit volume;
obliging financial institutions to report their risk exposure in terms of high carbo investments;
rethinking both the system of quarterly reporting, and the compensation system for people working in financial #institutions, which is currently based on short-term performance ;
introducing long-term planning by rethinking the system of discounting future values;
rethinking business models so that revenue is earned through performance and high-quality service rather than #simply selling “more stuff”.

9. It has been suggested that ‘decoupling’ the link between economic growth and the use of energy and materials will produce ‘green’ growth. The results have been poor, however, as the gains are frequently eaten up by continued economic growth. A way out of this conundrum is to focus on effectiveness – i. e. doing the right things – rather than on efficiency alone.

The main thrust ought to be for a circular economy, with industrial systems that are efficient and waste-free. Products should be designed for longer use, reuse, disassembly and refurbishment. Materials should be reused and recycled, thus reducing the demand for mining and new manufacturing, while increasing demand for reuse, recycling, maintenance and repair, This would help create jobs at local level.

The circular economy could be promoted through adopting binding targets for resource efficiency, increasing taxes on the use of virgin materials and refocusing research policy on sustainable innovation and design.

10. We need strategies for planetary stewardship. Solutions and policies must pass through a “nine billion filter”, i.e. work for a future population of nine billion people. This means delivering services that offer gains in resource efficiency by a factor of five or more, building a low-carbon and resource-efficient infrastructure, and seek systems-based and transformative solutions.

11. Birth rates continue to be very high in many of the poorest countries. When a country’s population increases by 3-4 % yearly it is extremely difficult to expand public services. In addition, many countries with high population growth also have growing shortages of water and arable land.

It has been claimed that world population growth is not a problem for sustainability, as poor people use fewer resources and have a smaller carbon footprint. This is a very short-term view, as everyone has the right to decent living conditions. It will be easier to reach sustainable solutions if world population can be stabilised, and the main measures to reduce birth rates are education for girls and family-planning.

12. While efforts to improve global governance have had limited success, the world must continue to work for global agreements, as well as working for local solutions, led by individual governments, cities and regions, companies and civil society organizations.”

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