Creating an Environmentally Sustainable Economy

As world population has doubled and as the global economy has expanded sevenfold over the last 50 years, our claims on the Earth have become excessive.

We are cutting trees faster than they can regenerate, overgrazing rangelands and converting them into deserts, over-cutting aquifers, and draining rivers dry. On our cropland, soil erosion exceeds new soil formation, slowly depriving the soil of its inherent fertility. We are taking fish from the ocean faster than they can reproduce.

We are releasing carbon dioxide (CO,) into the atmosphere faster than nature can absorb it, creating the greenhouse effect. As atmospheric CO₂ levels rise, so does the Earth’s temperature.

Habitat destruction and climate change are destroying plant and animal species far faster than new species can evolve, launching the first mass extinction since the one that eradicated dinosaurs 65 million years ago.

Throughout history, humans have lived on the Earth’s sustainable yield the interest from its natural endowment. But now we are consuming the endowment itself. In ecology, as in economics, we can consume principal along with interest in the short run, but in the long run this consumption leads to bankruptcy.

A team of scientists recently concluded that humanity’s collective demands first surpassed the Earth’s regenerative capacity in 1980. This study, published by the U.S. National Academy of Sciences, estimated our demands in 1999 exceeded that capacity by 20 percent.

Bubble economies are not new. U.S. investors got an up-close view of this phenomenon when the bubble of high-tech stocks burst in 2000 and the NASDAQ, an indicator of the value of these stocks, declined by some 75 percent.

Japan had a similar experience in 1989 when the real estate bubble burst, depreciating stock and real estate assets by 60 percent. The bad-debt fallout and other effects of this collapse have left the once-dynamic Japanese economy dead in the water.

The bursting of these two bubbles primarily affected people living in the United States and Japan, but the global bubble economy based on the overconsumption of the Earth’s natural capital assets — our water, forests and soil — will affect the entire world. The challenge for our generation is to deflate the economic bubble before it bursts.

China’s expanding ecological deficits are converging to create a dust bowl of historic dimensions, threatening to create millions of refugees.

Unfortunately, since Sept. 11, 2001, political leaders, diplomats and the media worldwide have been preoccupied with terrorism and, more recently, the invasion of Iraq.

Terrorism is certainly a matter of concern, but if it diverts our attention from the environmental trends undermining our future until it is too late to reverse them, Osama Bin Laden and his followers will have achieved their goal in ways they could not have imagined.

In February 2003, U.N. demographers made an announcement that was in some ways more shocking than the Sept. 11 attack: The worldwide rise in life expectancy has been dramatically reversed for a large segment of humanity — the 700 million people living in sub-Sahara Africa. The HIV epidemic has reduced life expectancy among this region’s people from 62 years to 47 years, and it may soon claim more lives than all the wars of the 20th century. If this teaches us anything, it is the high cost of neglecting newly emerging threats.

The HIV epidemic is not the only emerging mega-threat. Numerous countries feed their growing populations by overpumping aquifers — a measure that virtually guarantees a future drop in food production when the aquifers are depleted. In effect, these countries are creating a food bubble economy-one in which food production is artificially inflated by the unsustainable use of groundwater.

Other mega-threats often neglected include eroding soils and expanding deserts, which threaten the livelihood and food supply of hundreds of millions of people.

Climate change is another mega-threat that’s not getting the attention it deserves from most governments, particularly that of the United States, the country responsible for a quarter of all the world’s carbon emissions.

Washington wants to wait until all the evidence on climate change is in, by which time it may be too late to prevent a wholesale warming of the planet. Just as governments in Africa watched HIV infection rates rise and did little about it, the United States is watching atmospheric CO, levels rise and doing little to check the increase.

Thus far, most of the environmental damage has been locally confined: the death of the Aral Sea, the burning rain forests of Indonesia, the collapse of the Canadian cod fishery, the melting of the glaciers that supply Andean cities with water, the dust howl forming in northwestern China and the depletion of the U.S. Great Plains aquifer.

But as these regional environmental events expand and multiply, they will progressively weaken the global economy, bringing closer the day when the economic bubble will burst.

Outstripping Our Supplies

Humanity’s demands on the Earth have multiplied over the last half-century as our numbers have increased, rising from 2.5 billion in 1950 to 6.1 billion in 2000. In fact. human population grew more over the past 50 years than it did during the preceding 4 million years since we emerged as a distinct species.

Incomes have risen even faster than population. Income per person around the world nearly tripled from 1950 to 2000. Growth in population and the rise in incomes expanded global economic output from just under $7 trillion (in 2001 U.S. dollars) of goods and services in 1950 to S46 trillion in 2000, a gain of nearly sevenfold.

Water demands also tripled as agricultural, industrial and residential uses climbed, outstripping the sustainable supply in many countries. As a result, water tables are falling and wells are going dry. We also are draining rivers, to the detriment of wildlife and ecosystems.

Fossil fuel use has quadrupled, setting in motion a rise in carbon emissions that is overwhelming nature’s capacity to fix CO₂ pollution. As a result of this carbon-fixing deficit, atmospheric CO₂ concentrations climbed from 316 parts per million (ppm) in 1959 to 369 ppm in 2000.

In light of these factors, the sector of the economy likely to unravel first is food. Eroding soils, deteriorating rangelands, collapsing fisheries, falling water tables and rising temperatures are converging to make it more difficult to expand food production fast enough to keep up with demand.

In 2002, the world grain harvest of 1,807 million tons fell short of world grain consumption by 100 million tons, or 5 percent. This shortfall, the largest on record, marked the third consecutive year of grain deficits, dropping grain reserves to the lowest level in a generation.

To make matters worse, farmers plow highly erodible land — land too dry or too steeply sloping to sustain cultivation — to satisfy the swelling demand. Each year billions of tons of topsoil are being blown away in dust storms or washed away in rainstorms, leaving farmers straggling to grow food for some 70 million additional people with less topsoil than the previous year.

Since 1998, world grain production per person has fallen 5 percent, suggesting the ranks of the hungry are now expanding. This demonstrates a widespread deterioration in the human condition.

Two New Challenges

As we exceed the Earth’s natural capacities, we create new problems. For example, farmers are now facing two new challenges: falling water tables and rising temperatures. Farmers today are the first to face widespread aquifer depletion and the loss of irrigation water. They also face higher temperatures than any generation since agriculture began 11,000 years ago.

The global average temperature has risen in each of the last three decades. The 16 warmest years since recordkeeping began in 1880 have all occurred since 1980.

With the three warmest years on record — 1998, 2001 and 2002 — coming in the last five years, crops are facing heat stresses that are without precedent.

Higher temperatures reduce crop yields through their effect on photosynthesis, moisture balance and fertilization. As the temperature rises above 94 degrees, photosynthesis slows and then ceases for many crops when it reaches 100 degrees. When temperatures in the U.S. Corn Belt are 100 degrees or higher, corn plants suffer from thermal shock and dehydration, and each such day shrinks the harvest.

In addition to decreasing photosynthesis and dehydrating plants, high temperatures impede the fertilization needed for seed formation. Recent findings indicate harvests could drop 11 percent by 2020 and 46 percent by 2050.

The second challenge facing farmers, falling water tables, also is recent. With traditional animal- or human-powered water-lifting devices it was almost impossible in the past to deplete aquifers. With the global spread of powerful diesel and electric pumps, however, overpumping has become commonplace. As the world demand for water has climbed, water tables have fallen in scores of countries, including China, India and the United States, which together produce nearly half of the world’s grain.

In the United States, the third major grain producer, water tables are falling under the southern Great Plains and in California, the country’s fruit and vegetable basket. As California’s population expands from 34 million to a projected 48 million by 2030, increasing urban water demands will siphon water from agriculture.

In addition to falling exponentially, water tables also are falling simultaneously in many countries. This means cutbacks in grain harvests will occur in many countries at more or less the same time. And they will occur at a time when the world’s population is growing by more than 70 million a year. Many countries are overpumping their aquifers: Pakistan, Iran and Mexico are some of the more populous ones.

Overpumping is a short-term solution that creates a dangerously deceptive illusion of food security — it supports a growing population while almost ensuring a future drop in food production. The water demand growth curve over the last 50 years looks like the population growth curve, except that it climbs more steeply. While world population growth was doubling, water use was tripling.

Farmers today are the first to face widespread aquifer depletion and the loss of irrigation water.

Ecological Meltdown in China

In the deteriorating relationship between the global economy and the Earth’s ecosystems, China is on the leading edge. More than 1 billion people and 400 million cattle, sheep and goats weigh heavily on the land.

Like many other countries, China is exceeding the carrying capacity of its ecosystem — overplowing its land, overgrazing its rangelands, overcutting its forests and overpumping its aquifers. In its determined effort to be self-sufficient in grain production, it cultivated highly erodible land in the arid northern and western provinces, land that is vulnerable to wind erosion.

While overplowing now is partly remedied by paying farmers to plant their grain land in trees, overgrazing is destroying vegetation and increasing wind erosion. China’s cattle, sheep and goat population more than tripled from 1950 to 2002.

The United States, a country with comparable grazing capacity, has 97 million cattle, while China has 106 million. For sheep and goats, the figures are 8 million versus 298 million. Concentrated in the western and northern provinces, sheep and goats are destroying the land’s protective vegetation. The wind does the rest, removing the soil and converting productive rangeland into desert.

China is now at war. Like guerrilla forces striking unexpectedly, old deserts are advancing and new ones are forming, forcing Beijing to fight on several fronts. And worse, the growing deserts are gaining momentum, occupying an ever-larger piece of China’s territory each year.

China’s expanding ecological deficits are converging to create a dust bowl of historic dimensions. With little vegetation remaining in parts of northern and western China, the strong winds of late winter and early spring can remove millions of tons of topsoil in a single day — soil that can take centuries to replace.

For the outside world, these storms draw attention to the dust bowl forming in China. On April 12, 2002, for instance, South Korea was engulfed by a huge dust storm from China that left residents of Seoul literally gasping for breath.

The U.S. Dust Bowl of the 1930s forced some 2.5 million ‘Okies’ and other refugees to leave the land, many of them heading west from Oklahoma, Texas and Kansas to California. But the dust bowl forming in China is much larger, and dur ing the 1930s, the U.S. Population was only 150 million — compared with 1.3 billion in China today. Whereas the U.S. migration was measured in the millions, China’s may measure in the tens of millions. As a U.S. embassy report, “The Grapes of Wrath in Inner Mongolia” noted, “Unfortunately, China’s 21st-century Okies’ have no California to escape to, at least not in China.””

Food: A National Security Issue

The ecological deficits — soil depletion and water shortages — will make it more difficult to sustain rapid growth in world food output. No one knows when the growth in food production will fall behind that of demand, driving up prices, but it may be much closer than we think. The triggering events that will precipitate future food shortages are likely to be spreading water shortages interacting with crop-withering heat waves in key food-producing regions. Grain prices will be the economic indicator most likely to signal serious trouble in the deteriorating relationship between the global economy and the Earth’s ecosystem.

Food is fast becoming a national security issue as growth in the world har vest slows and falling water tables and rising temperatures hint at future shortages. More than 100 countries import part of the wheat they consume. Some 40 import rice. While some countries are only marginally dependent on imports, others could not survive without them. Iran and Egypt rely on imports for 40 percent of their grain supply. For Algeria, Japan, South Korea and Taiwan, among others, it is 70 percent or more. For Israel and Yemen, more than 90 percent. Just six countries — the United States, Canada, France, Australia, Argentina and Thailand — supply 90 percent of grain exports. The United States alone controls close to half of world grain exports, a larger share than Saudi Arabia does of oil.

Thus far the countries importing heavily are small and middle-sized ones. But soon, China, the world’s most populous country, is likely to turn to world markets in a major way. In 1972, following a weather-reduced harvest, the former Soviet Union unexpectedly turned to the world market for roughly a tenth of its grain supply. World wheat prices climbed from $1.90 to $4.89 a bushel, and bread prices soon rose, too.

For the world’s poor — the millions living in cities on $1 per day or less and already spending 70 percent of their income on food — rising grain prices would be life-threatening. A doubling of world grain prices today could impoverish more people in a shorter period of time than any event in history. With desperate people holding their governments responsible, such a price rise also could destabilize governments of low-income, grain-importing countries.

If China depletes its grain reserves and turns to the world grain market to cover its shortfall, now 40 million tons per year, it could destabilize world grain markets overnight. Turning to the world market means turning to the United State, presenting a potentially delicate geopolitical situation in which 1.3 billion Chinese consumers with a $100-hillion trade surplus with the United States will be competing with American consumers for U.S. grain. If this leads to rising food prices in the United States, how will the government respond? In times past, it could have restricted exports, even imposing an export embargo, as it did with soybeans to Japan in 1974. But today the United States has a stake in a politically stable China. With an economy growing at 7 percent to 8 percent a year, China is the engine powering not only the Asian economy but, to some degree, the world economy.

Historically, the world had two food reserves: the global carry-over stocks of grain and the cropland idled under tire U.S. farm program to limit production. The latter could be brought into production within a year. Since the U.S. land set-aside program ended in 1996, however, the world has had only carry-over stocks as a reserve.

Food security has changed in other ways. Traditionally it was largely an agricultural matter, but now it is something for which our entire society is responsible. National population and energy policies may have a greater effect on food securi ty than agricultural policies do. With most of the 3 billion people to be added to the world’s population by 2050 being born in countries already facing water shortages, childbearing decisions may have a greater effect on food security than crop-planting decisions. Achieving an acceptable balance between food and people depends on family planners and farmers working together.

Climate change is the wild card in the food security deck. It is perhaps a measure of the complexity of our time that decisions made in ministries of energy may have a greater effect on food security than those made in ministries of agriculture. The effects of population and energy policies on food security differ in one important respect: Population stability can be achieved by a country acting unilaterally; climate stability cannot.

The Case for Plan B

Although the stakes are high and time is not on our side, solutions exist to the problems we face.

Unless quickly reversed, the damaging trends we have set in motion will generate vast numbers of environmental refugees — people abandoning depleted aquifers and exhausted soils, and those fleeing advancing deserts and rising seas. In a world where civilization is being squeezed between expanding deserts from the interior of continents and rising seas on the periphery, refugees are likely to number not in the millions but in the tens of millions. As aquifers are depleted and wells go dry, refugees already are escaping drifting sand in Nigeria, Iran and China, and we now face the potential wholesale evacuation of cities.

A reversal of the basic trends of social progress of the last half-century has long seemed unthinkable. Progress appeared inevitable. But now we are seeing reversals: The number of the hungry may be increasing for the first time since the wartorn decade of 1940. And a rise in life expectancy — a seminal measure of economic and social progress — has been interrupted in sub-Sahara Africa by the HIV epidemic.

As millions of able-bodied adults die, families are often left with no one to work in the fields. The disease and spreading hunger weaken immune systems and thus, reinforce each other.

The world is moving into uncharted territory as human demands override the sustainable yield of natural systems. The risk is that people will lose confidence in the capacity of their governments to cope with such problems, leading to social breakdown. The shift to anarchy is already evident in countries stick as Afghanistan, the Democratic Republic of the Congo and Somalia.

Business as usual — Plan A — is clearly not working. Although the stakes are high and time is not on our side, solutions exist to the problems we face. The bad news is that if we continue to rely on timid, incremental responses, our bubble economy will continue to grow until it bursts.

I believe we must adopt a new approach — Plan B — an urgent reordering of priorities and a restructuring of the global economy in order to prevent that from happening.

In Part II, to be featured in the February/March 2004 issue, Brown will outline how we can transform our global economy to ensure environmental sustainability and economic health.

To receive free e-mail updates on these future-shaping issues from Brown’s Earth Policy Institute, go to www.earth-policy.org.

Brown’s new book, Plan 8: Rescuing a Planet Under Stress and a Civilization in Trouble, is available on MOTHER’S Bookshelf, Page 94 in this issue.