Economic Meltdown and Environmental Predictions

Analogies are always risky because they assume that two separate sets of circumstances are comparable. But the current meltdown of the global economy and the planet's deteriorating environmental health have parallels that are just too striking to disregard.

This parallel was perhaps expressed most explicitly by Dr. Jeremy Kerr, a biology professor at the University of Ottawa (The Vancouver Sun, Nov. 21/08). Professor Kerr was responding to the Canadian government's recent decision to "ease regulations on environmental assessments for natural gas exploration" across the country. "The shining example of deregulation is the present free-fall of the world's developed economies," he said. "You can apply exactly the same analogy to natural systems. Deregulating development in natural systems is likely to do ecologically exactly what deregulation did economically."

And what exactly could be the ultimate effect of such economic deregulation? No one seems to know. James Galbraith, a prominent American economist, acknowledged of the global economic meltdown that "perhaps only a dozen of the 15,000 economists in the US foresaw the depth and seriousness of the mortgage crisis" (The Vancouver Sun, Nov. 21/08). "It's an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless."

As for the wise and foresighted guidance of Alan Greenspan, the former chairperson of the US Federal Reserve who was singularly most responsible for the deregulation that precipitated the global economic crisis. "I made a mistake," he said, "in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms" (Ibid.).

"In other words," writes Pete McMartin in his Vancouver Sun column, "Greenspan not only erred in his belief in deregulation, he also misread the human psyche, and the depth to which greed could narcotize prudence."

Three insights collide here with worrisome impact. First, even the majority of experts have no clear understanding of all the fundamentals that regulate economics. Second, no one knows the tipping point that will send the entire economic structure into disarray — in this particular instance it was a small fall in the price of over mortgaged houses. And third, human greed can make a mockery of any system that is supposed to safeguard our collective wellbeing.

The same three insights apply to our understanding of the global environmental system. Although the UN's Intergovernmental Panel on Climate Change (IPCC) has made reasonably certain predictions about the general effects of increasing levels of atmospheric carbon dioxide on worldwide climate, its scientists are honest enough to acknowledge that their models cannot accurately forecast local effects. Said Dr. Tim Palmer, a leading climate modeller at the UK's European Centre for Medium Range Weather Forecasts, "I don't want to undermine the IPCC, but the forecasts, especially for regional climate change, are immensely uncertain" (New Scientist, May 3/08). In other words, we don't clearly understand the mechanisms that control local climate.

Unfortunately, even the best of climate science remains "immensely uncertain". European governments, for example, are trying to limit a global temperature increase to 2°C by holding levels of atmospheric CO2 at 450 parts per million — the pre industrial level was 280 ppm and the current level of August is 388 ppm. But a recent report by James Hansen of the NASA Goddard Institute for Space Studies, found that 50 million years ago, when the planet was cooling from falling levels of high atmospheric CO2, 425 ppm was the tipping point at which Antarctica suddenly got its ice cap (Ibid.). If the same concentrations trigger sudden changes during rising levels of CO2, a target of 450 ppm might be above the tipping point that would set in motion a melting of Antarctica and a rising of global sea levels by 60 metres.

For complex ecologies, as in economics, we really don't know what insignificant factor will trigger massive restructuring change in a stressed system. Florida Bay in America's Florida Keys is an instructive example. For years, without apparent effect, pollution from septic systems had been flowing into a clear-water ecosystem of seagrasses and manatees. Then, in the early 1990s, effluent reached a critical, unanticipated threshold and plankton blooms suddenly converted the pristine Bay into a murky dead zone (New Scientist, Apr. 12/08).

The same unpredictable tipping points are likely awaiting in other major ecosystems. The Amazonian forests are vast enough to generate their own rainfall. At some uncertain time, however, as more trees are removed, scientists speculate that the entire basin could lose its weather-making capabilities and the ecology could collapse "in a rage of droughts and forest fires" (Ibid.). Similarly, we don't know when Arctic warming could melt frozen tundra, releasing millions of tonnes of stored methane gas in an unstoppable feedback loop of warming and melting. More locally, who could have predicted that the absence of a few cold winters in BC's interior would release the fury of an innocuous little beetle, devastating 80% of the province's pine forests? And paltry salmon returns, together with starving orcas and bears, may just be a hint of the effect of rising ocean temperatures on our West Coast ecology.

As for human greed, it clearly exercises itself in economics, and its excesses are equally obvious in our use of the environment.

Trillions of dollars in aid from the world's governments have not been able to avert devastation in our stressed global economic system. This financial crisis should remind us that stressed ecologies are equally precarious.