Carbon and Debt

Are there parallels between the 'debt crisis and the carbon emissions crisis?

Are there parallels between the 'debt crisis and the carbon emissions crisis?

I have been struck recently by profound similarities between the debt crisis and the carbon crisis. Here are seven points: see what you think:

  • Both these crises arise from a choice to consume now and pay later.  With the debt issue, this is true both at a personal and a national level. Politicians have shied away from making people aware of the true cost of their policies for fear on unpopularity. Similarly, because of the potential unpopularity of the policies required to address carbon emissions, politicians have held back from policies that would dramatically cut carbon emissions.
  • Both these crises require us to address intergenerational morality.  In the same way that it is unfair to spend money now and expect our children to pay it back, so it is unfair to emit carbon now, and expect our children to deal with the consequences.
  • Both these crises require international solutions.  National politicians have failed us: they are unable to resist spending and borrowing more in order to stay popular. And so the Eurozone have now called for central oversight of national budgets to make sure countries do not surreptitiously borrow too much. Similarly, the nations of the world require external limits to be imposed upon them. Only in this way can politicians tell their people: ‘its not our fault’.
  • Neither of these crises will ever be ‘solved’ – they are perpetual struggles not isolated events.  Recent events in Europe may make it seem that a particular path to a solution has been found. But it hasn’t. The forces which drove Europe into its difficulties and which created spectacular indebtedness in the UK are still all in play. Similarly, the outcome of the Durban conference is neither a cause for celebration or depression: it is just another step on the path, and we really don’t know what lies ahead.
  • Accounting is difficult and dull and boring. But essential. This has been true of financial accounting for many years, and it will be equally true of carbon accounting when the concept becomes established. But what appears to be a constraint on freedoms or our growth, is simply a way of staying honest.
  • Spending money you have borrowed is like burning carbon: it makes us feel good. Building a hospital we can’t afford brings benefits and so does burning carbon – we get improved lifestyles today – and much cheaper than the sustainable lifestyles we might aspire to. But eventually we will have to pay the cost. In financial terms this can involve reduced incomes which will the harm people’s health as well as their wealth. In carbon terms, we really don’t know what the costs will be, or who will be required to pay them.
  • Paying back debt is really hard: if you have ever had to pay back any significant amount of debt, then you know how hard it is. This is as true for nations as it is for people – with additional unfairness in that the people who borrowed the money and benefitted are not the people who have to pay it back. If we are to ever get back to some kind of carbon neutral economy then it will involve real pain as we wean ourselves off carbon emitting technologies. Real pain – and most probably real reductions in quality of life.

I could go on because I think the parallels are quite deep, but I think I have made the point. However, I do just want to add that in both cases, there is no need to despair. The world is very beautiful, and very resilient. And we have each other. If we can learn a lesson, and teach our children, then we can still make things better than they otherwise would have been.

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