Earth, Inc. Sliding Into Bankruptcy
Build a shrimp farm in Thailand by cutting down mangrove forests and you will net about 8,000 dollars per hectare. Meanwhile, the destruction of the forest and pollution from the farm will result in a loss of ecosystems worth 35,000 dollars/ha per year.
Many leading development institutions and policy-makers still fail to understand that this ruthless exploitation for short-term profits could trigger an Enron-like collapse of “Earth, Inc.”, experts say.
For example, the World Bank and other economic development agencies would happily loan a shrimp farmer 100,000 dollars to clear more mangroves.
All economies depend on the natural capital lying within nature’s lands, waters, forests, and reefs, but humans have often treated them as if they had little value or were inexhaustible.
“Up till now, humans have been exploiting natural capital to maximize production of food, timber, oil and minerals at the expense of soil, water and biodiversity,” said Janet Ranganathan, director of people and ecosystems at the Washington-based World Resources Institute.
“Usually only a few people benefit from this exploitation,” Ranganathan, who co-authored a new report called “Restoring Nature’s Capital: An Action Agenda to Sustain Ecosystem Services“, told IPS.
Worse still is that this approach to nature is extremely destructive and short-sighted, she said.
Since 1980, nearly 35 percent of the world’s coastal mangroves have been cut down, most often for shrimp aquaculture. Vietnam, for example, has lost over 80 percent of its coastal mangroves to such operations.
The 2004 Indian Ocean tsunami that killed nearly 230,000 people provided ample evidence that mangroves can protect or at the very least buffer communities from the worst impacts of tidal waves and storms.
Unfortunately, that particular “service” is not captured or valued by the marketplace, said Ranganathan.
Nor does the market value the vital role mangroves play as a nursery habitat for marine life, crucial to the health of offshore fisheries, or the service they provide filtering pollutants which in turn protect coral reefs, another important nursery for fish. Ignored as well are the substantial economic benefits mangroves provide in preventing the shoreline erosion that is threatening many coastal countries like Thailand, where the shoreline is retreating 25 meters each year in some areas.
Nature’s services, which are as real as any shrimp platter, are simply left out of the current economic system. Also ignored are the environmental and social costs of shrimp farming such as water pollution, land degradation and impacts on local fishers.
“Studies show that shrimp farms in southern Thailand have a lifespan of just five years,” Ranganathan said. “If we valued ecosystems properly, it would change how we make development decisions.”
After five years, the water is too polluted to raise shrimp and the operation moves down the coast. Such operations are often subsidized directly and indirectly with nominal land rent, taxes and even development grants and loans. When the real costs of shrimp aquaculture are taken into account, its value is 5,443 dollars per hectare, according to an in-depth analysis.
Meanwhile, the real value to society of intact mangroves is a whopping 35,696 dollars per hectare.
While the actual value of ecosystems and the services they provide can sometimes be hard to calculate, the fact of the matter is that they are not zero, says Ranganathan.
Of all places, New York City figured that out some years ago.
New York’s tap water has never passed through a filtration plant and is considered some of best quality water available in any U.S. city. In the late 1980s, rather than building a six- to eight-billion-dollar water treatment plant, the city decided it was far cheaper and better to protect and restore the source of its water supply, the Catskill/Delaware forests and wetlands.
The total cost? One and a half billion dollars. And that’s without subtracting the considerable value of the additional services the protected area provides in terms of human recreation, better air quality, and carbon sequestration.
Sadly, this approach is all too rare, as evidenced by the Millennium Ecosystem Assessment (MA), the first global scientific audit of the Earth’s natural capital.
In 2005, the MA showed that 15 of the world’s 24 ecosystem services are being degraded or used unsustainably. In business terms, this meant that nearly two-thirds of the “company’s” 24 divisions examined are in the red; only four are profitable, while the other five showed mixed results regionally.
Clearly, “Earth, Inc.” is in deep trouble.
Improvements in technology and modernization won’t rescue our planet from the depletion of the Earth’s natural capital, says Eugene Rosa, a professor of natural resources and environmental policy at Washington State University.
Rosa and colleagues have developed a scientific model called STIRPAT to assess human interactions with the environment. They determined that natural capital will continue its sharp decline due to growth in population and consumption.
Even if nations increased their energy and resource-use efficiency four-fold, there isn’t enough natural capital left intact to continue business as usual, Rosa said in an interview.
“This really isn’t a surprising result, but there has been little discussion about population and consumption patterns,” he said.
North America and European lifestyles are simply not sustainable, he says. Other analyses have demonstrated the need for four or five more planets if everyone lived like the average U.S. citizen.
And let’s not forget that climate change — the dumping of vast quantities of carbon from the burning of fossil fuels into the atmosphere — is another unaccounted cost that’s having a major impact on ecosystem services.
“Lima in Peru, for example, is entirely dependent on water from glacial melt,” noted Jonathan Lash, president of WRI.
“[But] the glaciers will be gone in 20 years,” Lash said in a statement.
Solutions for Lima, such as a pipeline to the Amazon River or building energy-intensive desalination plants, are also vulnerable to changes in climate.
Lash urges a focus on how climate change is altering ecosystem services.
Turning around this dreadfully managed and exploited company “Earth, Inc.” will be an enormous task, requiring fundamentally new approaches to managing its precious and declining assets “upon which all life depends”, the WRI report concludes.
The question now is whether humanity is psychologically ready and willing to accept such fundamental changes.
*This article is part one of a three-part series on natural capital and how future global prosperity and equity can be achieved through the preservation of ecosystems.
Copyright © 2007 IPS-Inter Press Service
The capitalist system needs to be honest about the accounting equation they live by. It’s missing something altogether. (ASSETS) Assets = Liability + Owners’ Equity
Assets = the planet in a perfect state.
Liability = Destruction of assets; impairing the ability of regeneration of those assets. This destruction profits quality of life for humans over indigenous species. It is also temporary on nature.
Owner’s Equity = Quality of life; for all life on earth. It’s a web of life so what affects the bees affects the trees and affects humans eventually.
My formula is evolving here so bear with me.
“Ecology” means “the study of the household”.
“Economy” means “the running of the household”.
Altering and trying to run our planet without knowing how it works first is a little like letting 5 year olds drive our cars and letting babies play with matches and guns all at the same time.
I will bet that if we were forced to pay the actual cost of depleting non-renewable resources, pay for the destruction of ecosystems, including the cost of global warming that our life style entails, just about everyone living in the US, Europe, and Australia would go broke overnight.
Only by externalizing costs can we live like this. We live high off the hog and everyone else foots the bill for us, including future generations. This sounds like a pretty accurate definition of a freeloader. Do you know anyone who likes freeloaders?
Those obsessed with capitalist money making goals and the “progress” of the economy rarely calculate the fact that economics will have absolutely nothing to do with our survival should these natural systems collapse. I know I’m preaching to the choir around here, but the environment is worth so much more than dollar amounts and economics. How do we measure the value of habitat for endangered species on the brink of extinction? Such importance is beyond calculation.
The dangers of Development have not been better shown than by the replacement of mangroves by shrimp farms.
Shrimp farms and luxury resorts have been built in areas formerly planted with mangroves….and the loss of mangroves in asia, helped make the 2004 tsunami death toll muich worse than it might otherwies have been
‘
Tsunami: Mangroves ’saved lives’
By Mark Kinver
Researchers say mangroves absorbed the impact of the tsunami
Healthy mangrove forests helped save lives in the Asia tsunami disaster, a new report has said. ‘
http://news.bbc.co.uk/2/hi/science/nature/4547032.stm
http://www.sciencedaily.com/releases/2005/10/051028141252.htm
Its important this wretched policy of building shrimp farms be stopped. Government policy and the greed of the few helped make the 2004 tsunami the catastrophe it was.
Rock on NMBill:
The Laws of Conservation apply to economics; ie, nothing is in fact created or destroyed, only aggregated and distributed into a particular order, for a particular moment in time.
In other words, for every profit there is an equal cost.
AND, as an object that exists purely to be exchanged, the Laws of Motion apply to money; ie, having the effect of two or more forces colliding, subject to conservation laws…
For every bit of wealth created…
Yet another example of how thoughtless meat production (and the consumption that drives such production) can be so destructive to ecosystems.
I saw this analogy in a book somewhere, but I forgot the details so I’m trying to recreate it; it’s something that made perfect sense at the time.
In my view you can’t put a price on the asset so the whole thing would be rated according to the health of land, lakes, ocean reefs and the overall health of oceans and air.
From a point in time on, we could agree on a scheme similar to carbon trading. When you destroy habitat; habitat has to be restored preferably connected to already wild areas. If we restore developed areas to habitat, we are gaining ground in restoring the earth back to health.
As we take more liability out for our luxury we crowd out all other life on earth in the owner’s equity; to the point of collapse of diversity.
Many of US society-solicited marine biologists of a generation ago realized then that mariculture was a red herring and have fought for the ensuing 3 decades to instead PRESERVE foodweb habitat, as US law, in fact REQUIRES (at least since 1985). Since the habitual destruction continues unabated; we have thus far FAILED (e.g., ecosystemic collapse of the US continental coral reef in the Florida Keys and time is short, with less than 7% remaining). NEXT (generation)?
I used to free dive in the keys in the early 60s and the visibility was 200 ft plus. Developments would dredge from the ocean in and the tide would carry the silt up the Gulf Stream. This practice killed reefs east of Miami and I doubt we will even save John Pennekamp Coral Reef State Park from bleaching out. It is the ignorance of the masses that this is not an outrage.
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Once a river flowed from a canyon to a lake where a village got its water. The river supported trout and riparian areas along its banks.
Then the village thought they could get more water by drilling wells at the source.
The river now only runs during the wet season; does not support fish and the lake dried up. The village now has to pay to maintain the wells and pump water out of the ground.
What was once easy became expensive at the expense of a river and the life it supported.
Overpopulation
Just to further the balance sheet analogy:
Assets = All the elements on this planet that were created or generated without human intervention but are necessary in order to ensure the existence of mankind. You could also include man made assets that benefit mankind
Liabilities = Present value of the destruction or reduction in the planetary assets. Assets that will have to be replaced one way or the other down the line in order to ensure the survival of every single human being.
Owners Equity = Net impact or net value to mankind remaining on this planet after taking into account the effects mankind has had by reducing the planetary assets
warsucks– Thanks, I’m open to ideas.
ezflyer– Exactly, when will MSM quit showing pro-babies propaganda. Its like puppy dogs, they sell because they are cute and most never consider or realize all the care they need.
Why is this done? Another human resource on the corporate “people farm” equils more profit for the farmer.
I don’t know when we decided the earth’s resources are infinite. I’m sure it seemed inexhaustible in the 18th and 19th centuries, but in the 20th that fairy tale became obviously just that — fictional. And yet the economic theory on which the industrialized world operates assumes growth into the unending future. Assume resources are infinite and that potential for growth is infinite. While you’re at it, let’s assume life is not subject to death and we can suspend the laws of physics — yes, gravity does not work. The world is run by people who feel they can make the rules, that they own the world’s resources because they’ve “developed” them (that means they taken them out of the ground on which other people live), that they have the right to defile the ecosystem to extract “their” profits, and that someone else must pay. Well, fact is we will all pay. Maybe humans will not make the evolutionary cut. Planet Earth will carry on, human life is certainly expendable.
Here is a link I posted over on “Great Apes Face Disaster”
Its a movie about Mass Exinction everyone should watch.
http://video.google.com/googleplayer.swf?docId=5972784234026351092&