20 June 2005

If one accepts that every individual has an inherently equal share of (or stake in) the global atmosphere, people in wealthy nations are using up far more than their fair share of the global atmospheric carbon budget. In doing so, and by not paying for the consequences of global warming, rich countries are running up huge ecological debts to the poor, majority world.

On 17 March 2005, surprise echoed around the world as news broke that Paul Wolfowitz, a leading United States neo-conservative, had been nominated for president of the World Bank. The surprise was amplified because the Bank had worked hard in recent years to align their image with their stated purpose of global poverty reduction. Nominating a candidate whose skills lay in formulating aggressive military strategy was guaranteed to increase the shock.

Wolfowitz's nomination was neither the first controversial one for the Bank, nor the first to coincide with a period of United States military adventurism. Wolfowitz may be hoping for an image change much like his predecessor, Robert McNamara. McNamara's reign at the Bank began in 1968 and rehabilitated his reputation, which had been damaged by his role in escalating US military aggression in Asia around the time of the Vietnam War.

Much of today's rhetorical commitment to global poverty reduction by international leaders can be traced back to McNamara's term of office. In fact, it was an undeserved reputation because between 1968 and 1981 when McNamara was president less than 10% of World Bank loans went to areas generally understood to target poverty directly, like health, education and supplying clean water.

At the time of McNamara's appointment, the American Association for the Advancement of Science posed three questions on world challenges. These remain unanswered today:

1.How to live on a finite earth.
2. How to live a good life on a finite earth.
3. How to live a good life on a finite earth at peace and without destructive mismatches.

Herman Daly, founder of environmental economics, took these observations and asked another question. He observed that the earth, observed from a physical science and biological perspective, is a steady-state open system characterised by a shifting, but self-balancing equilibrium. He asked, 'Why not our economy also?'

Today, in asking how to re-engineer the global economy to be climate proof, climate friendly, secure and able to provide everyone the opportunity for a 'good life', World Bank plans require close examination. This is because we are trapped between two debt crises: the foreign financial debt crisis suffered by most of the poor world (which depending on your viewpoint has been either managed or exacerbated by the World Bank), and the ecological debt crisis faced by the rich world, best demonstrated by climate change.

Both are the result of economics, or rather, the stories economists tell. The differences between the two financial and ecological debt crises can tell us much about what went wrong, and the language of economics and debt can give us fresh insights into the biggest ecological debt of all: climate change.

More than any more institution, the Bank has set the framework for development policy in recent decades. Its drive to privatise, liberalise and deregulate - the so-called 'Washington consensus' - is now largely discredited, but still affects policies enough to prevent better, more flexible alternatives.

The main reason that the Bank could dictate the economic futures of so much of the Southern hemisphere for so long, was because of the leverage it had through those countries' foreign debts. All countries borrow and the Bank held the key to international finance. An indebted country that did not do what the Bank said was excluded from the international financial system.

Foreign debt and the promised escape pathway of 'structural adjustment' have been the dominant development narrative for over two decades. Reconciling the North's ecological debt could now become the new narrative in the coming decades for a different development path.

The most interesting thing about much poor country debt, compared to Northern ecological equivalents, is its illegitimacy. From the International Monetary Fund (IMF)-approved kleptocratic government in Mobutu's Zaire, to the corruption, asset stripping and violence of Nigeria's oil fields, there are many examples of how responsibility for Southern countries' debts lay at least as much in Western capitals. With the ecological debt of climate change, however, responsibility is much easier to attribute, and much harder to argue with.

Yet, somehow in international relations we have a situation where 'debtor' is a term synonymous with economically weak poor countries. And 'creditor' refers to the so-called efficient rich, industrialised nations. These terms are not just economically descriptive. They carry weight and moral judgments. 'Debtor' suggests fecklessness, dependency and incapacity. 'Creditor' suggests support, generosity, trustworthiness and solidity.

In the last 50 years, strategically important friends of rich and powerful countries have had their debts written off, and poor, strategically unimportant countries have been forced to repay. Germany was given post-war debt relief in 1953 around four times more generous than that offered to the least developed countries in Africa during the 1990s. Egypt was treated well after the Gulf War, as was Poland during the end of the Cold War. By contrast, in 1997 the Archbishop of Cape Town said, 'The external debt of developing countries has become an eternal debt.'

After seven years of the Bank-sponsored Highly Indebted Poor Country (HIPC) debt relief initiative, by 2003 only eight countries had had any of their debt cancelled. Of the original 41 highly indebted countries, 39 (that were functioning states) would still require total debt cancellation to stand any chance of meeting poverty reduction targets. Yet even to benefit from small amounts of debt relief, very poor countries had to cope with economic policy conditions, which by a growing consensus caused more harm than good.

Poor countries, lacking the systems of health, education and social support that the North enjoys, had to tolerate badly designed 'structural adjustment programmes' intended to solve the debt crisis. The Financial Times (a conservative British newspaper) commented that the IMF, the Bank's sister organisation, through promoting these programmes under the so-called Washington consensus 'probably ruined as many economies as they have saved'. Nobel Prize-winning economist James Tobin echoed this thought, saying, 'Their standard remedies, fiscal stringency and punitive interest rates, are devastating to economic life.'

Southern experiences with largely illegitimate financial debt problems shame the Northern reluctance to adjust lifestyles in any way, in view of ecological debts. I call climate change an ecological debt problem because it represents a large group of society living increasingly beyond its means. When you use more than your fair share of the Earth's resources (in this case atmospheric ability to safely absorb greenhouse gases) you accumulate an ecological debt.

A decade after the United Nations Framework Convention on Climate Change (UNFCCC) was signed, countries including the United States, Australia, Canada, and many European nations are emitting more carbon dioxide per person than they were at the time of the 1992 Earth Summit. To put this in perspective, in less than two days a US family uses the equivalent in fossil fuels per person as a family in Tanzania will depend on for the whole year.

If the idea of ecological debt sounds novel, the principle is not. In the 19th century, the patriotic observer of the British Empire Robert Southey had a character in his Letters from England comment, 'All parts of the world are ransacked for the Englishman's table.' The 1960s saw a second wave of anxiety about unsupportable population levels. This inspired Georg Borgstrom to comment on the 'ghost acres' that wealthy countries like Britain depended on in other lands to feed their people.

In 1974, Ivan Illich writing in Energy and Equity considered notions of well being and conviviality in relation to energy dependency. He wrote that a society based on low energy use and equal access to resources would be more convivial and supportive of democracy; 'a low energy policy allows for a wide choice of lifestyles and cultures. If, on the other hand, a society opts for high energy consumption, its social relations must be dictated by technocracy and will be equally distasteful whether labelled capitalist or socialist.'

In the late 1980s, enquiries into equity and geographical carrying capacity introduced the language of 'environmental space'. At the start of the 1990s, Canadian geographer William Rees began talking about 'ecological footprints'. The late Indian environmentalist Anil Agarwal, with colleague Sunita Narain, applied a harder political edge to these arguments in 1990 in Global Warming in an Unequal World, which exposed the wildly different degrees to which people in rich and poor countries pollute. They also wrote about what they called 'environmental colonialism'.

These people all showed that rich people took up a lot of space. They were like cars badly parked at a supermarket, crossing several parking bays and using more than their fair share of space.

Before the 1992 Earth Summit, a group from Latin America and the Caribbean compiled a report called Our Common Future. This argued that 'the industrial revolution was based in large part on the exploitation of natural resources in ways which did not reflect their true costs'. It concluded, 'The industrialised countries have incurred an ecological debt with the world.' Ecuador is now home to a campaign to reclaim the debt.

Although financial debt topped the anti-poverty agenda in numerous international meetings in the mid-to-late 1990s, both climate change as an issue, and ecological debt as a concept, were almost absent in the mainstream development debate. Now it is time to put the concept of ecological debt, and the necessary adjustments that this will require, into negotiations on what will follow the Kyoto Protocol. We must argue for the rich country emission cuts of 60-90% that science tells us are necessary.

Economic superpowers have been as successful today in their disproportionate occupation of the atmosphere with carbon emissions, as they were in their military occupation of the terrestrial world in colonial times. Until the Second World War, they managed this atmospheric occupation largely by exploiting their own fossil fuel reserves. However, from around 1950, as global incomes diverged, industrialised countries became increasingly dependent on energy imports.

Less developed countries experienced the opposite. From about the same time they began to produce more than they consumed.

Using a 'World Energy Gini Coefficient' to measure inequality, Bruce Podobnik shows that for the second half of the last century, with the exception of one decade, global inequality in energy consumption continued to increase in line with a long historical trend. By 1998, the wealthiest fifth of the world's population were consuming 68% of commercial energy, and the poorest fifth, 2%.

But is there any hope that the advanced industrial economies could make the cuts in resource use required? To reject this challenge would be very hypocritical. The world's poorest countries have had to reshape their economies for decades to pay service on unprincipled foreign debts.

There should therefore be no reason why rich countries cannot do the same to pay off their more real ecological debts. It is time for the rich world to work within 'sustainability adjustment programmes' under a negotiated framework for shrinking global emissions in which entitlements to emit greenhouse gases move within a set time frame to equal per capita shares.

The language of fiscal restraint permeates the neo-liberal economies that still dominate official development thinking. Yet the concept of living within our environmental means still escapes mainstream economics. Climate change and the challenge of reconciling our ecological debts could, finally, change this.

Everyone from the former UN weapons inspector Hans Blix, to Sir John Houghton, formerly of the Intergovernmental Panel on Climate Change, and UK government chief scientific adviser David King, have all said that climate change is a greater threat to the world than terrorism.

If Paul Wolfowitz does take over from James Wolfensohn at the World Bank, the question will be the same of all new generals; is he capable of fighting the new war, rather than re-fighting the old one, so that we can all have a 'good life on a finite earth at peace and without destructive mismatches'.



About the writer: Andrew Simms is Policy Director of the New Economics Foundation. (andrew.simms@neweconomics.org)

The above article was first published in Tiempo (Issue 55, April 2005), and was then reproduced by the Third World Network Features with permission.