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Inter Press Service

Environment: Twisted As Unnaturally as the Banks

Julio Godoy

Grameen Bank director and Nobel Peace Prize winner Muhammad Yunus speaks during the inauguration of the IUCN World Conservation Congress in Barcelona October 5, 2008. (REUTERS/Albert Gea - Spain)

BARCELONA - The financial meltdown in most of the industrialised world presents an opportunity for a new economic model that would end short-sighted search for high returns, according to leading economists attending the IUCN World Conservation Congress here.

"Right now, the most conservative leaders in the industrialised world, such as George W. Bush of the U.S. and Angela Merkel of Germany are allocating public money to save the banks from bankruptcy," Alejandro Nadal, a Mexican economist attending the congress told IPS.

"This rediscovery of the role of the state as a major actor in economic affairs, and the perspective of a new regulation of international financial transactions opens a window of opportunity to rethink neoliberalism in the developing world," Nadal said.

"This is not only an academic question, it is an extreme political matter," he said. And it can have an environmental dimension, he said. Nadal urged the IUCN to coordinate a global effort among civil society organisations to rethink the role of the state in linking macro-economic and environmental policies.

The IUCN (International Union for Conservation of Nature), organiser of the Barcelona congress that continues until Oct. 15, is the oldest and largest global environmental network, with a membership of more than 1,000 governments and NGOs, and almost 11,000 volunteer scientists in more than 160 countries.

"It is time for civil society and environmental organisations to take the world," Pavan Sukhdev, an Indian economist and co-author of 'The Economics of Ecosystems and Sustainability' told IPS.

Unlike earlier crises such as the stock exchange crash of 1987, or the currency crisis of the 1990s in Latin America, South East Asia and Russia, the present crisis has come amidst a new awareness of the dramatic environmental costs of neo-liberalism, Sukhdev said.

"Back then, most of us had no idea of the environmental crisis lurking in nature. But now we are aware that we cannot go on with this economic model based on the destruction of biodiversity and the abuse of most of humankind.

"Now we have the wind on our backs. And when you have wind in your sails, you sail. Let's sail towards a new economic model, one that respects both nature and humanity, instead of this one that destroys them."

Joan Martínez Alier, professor of economics and economic history at the Autonomous University of Barcelona, said the present economic crisis "will mean a welcome change to the totally unsustainable increase of carbon dioxide (CO2) emissions in the last few years."

Carbon dioxide is considered by scientists to be the principal greenhouse gas arising from the combustion of fossil fuels. Greenhouse gases are thought to cause global warming, and consequently climate change and the decimation of biodiversity.

Alier believes the economic crisis, by reducing industrial and transport activities, offers an opportunity to put the economy on a different trajectory regarding material and energy consumption, and could therefore help reduce greenhouse gas emissions.

"The crisis might also offer an opportunity for restructuring social institutions in industrialised countries, with the objective of living well without the imperative of economic growth," Alier said. "Happiness is not necessarily a function of economic growth, above a certain level of income."

But in developing countries, the economic crisis could damage the environment for the converse reason. Since below a certain income level wellbeing is dependent on economic growth, governments may push economic activity regardless of its environmental costs in order to overcome the economic crisis.

"The global economy could suffer a deep and protracted recession as a consequence of the financial crisis," Argentine economist Alain Cibils told IPS. "As the crisis unfolds, priorities will be put on recovery for growth and employment, and controlling inflation, instead of forestalling climate change. Protecting biodiversity, aquifers and soil erosion may be seen as non-priorities."

Cibils said that the neoliberal economic model applied in Argentina, Brazil, Mexico, and other Latin American countries since the late 1980s has given priority to macroeconomic policies aimed at reducing inflation and fiscal deficits, and increasing export, regardless of social and environmental costs.

"These policies are epitomised in Argentina by intensive year-round agriculture concentrated on a couple of crops such as soybean and maize, and priority to short-term high-returns, very much as in financial globalisation," Cibils said.

The land area cultivated with soybean has more than doubled in Argentina from seven million hectares in 1997 to 16 million hectares in 2008. The land for wheat cultivation has remained constant.

"Soybean growing has taken place in Argentina at the expense of native forests," Cibils said. "Year-round agriculture has produced severe soil nutrient depletion and soil degradation, and a substantial loss of biodiversity."


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