The next global debt crisis
Today’s global sovereign debt crisis is keeping a lot of government and business leaders up at night. But another global debt crisis is brewing that, while invisible to most CFOs and finance ministers, threatens to unleash long-term economic hardships that make today’s recessionary worries seem trivial.
At risk are critical life-support systems that are also the lifeblood of our global economy. These natural land and marine systems, thanks to more than four billion years of planetary R&D, far outcompete man-made technology in their capacity to churn out—at scale and affordably—vital goods and services we need for global economic stability and growth. Without charge, this living natural infrastructure works behind the scenes to purify massive amounts of precious drinking water and breathable air; generate abundant and stable supplies of raw materials and commodities integral to supply chains; replenish fertile soil and fish stocks needed to meet growing food demand; buffer people and businesses from the worst effects of floods, droughts, fires and extreme weather events; provide barriers to the spread of disease; maintain awe-inspiring destinations that fuel tourism; and house a treasure trove of biological information that propels scientific and medical breakthroughs.
How much is our current mismanagement of natural assets costing the global economy today? The most recent U.N. estimates are around $6.6 trillion a year—the equivalent of 11% of global gross domestic product—through effects like contamination of water supplies, loss of fertile land through soil erosion and drought, and supply chain disruptions from deforestation and overfishing. The damage could skyrocket to $28 trillion by 2050 under business as usual, which would eclipse the economic damage expected from climate change.
Today’s more farsighted business leaders grasp what’s at stake. They know that investments in protecting and maintaining natural systems are mandatory to ensure continued opportunities and prosperity for businesses, communities, and even nations—not optional philanthropic acts.
These forward-thinking companies are among a growing list of those getting out ahead of governments in forging solutions to the accelerating “natural debt” crisis. To add to the momentum, this week the Corporate Eco Forum that I chair—a membership group of 80 large companies with combined revenues of over $3 trillion—announces a new initiative on the “Business Logic of Investing in Natural Infrastructure” at the Clinton Global Initiative. Over the next nine months, we will work with our diverse membership to catalyze a new round of private sector-led commitments to safeguard natural assets, to be announced at the June 2012 Earth Summit, in Rio de Janeiro.
Turning around the brewing natural debt crisis will require broader participation from visionary business leaders, especially when the world’s governments are consumed by more urgent short-term economic challenges. But time and again, the private sector has shown its enormous capacity to innovate fast to solve big problems. Let’s hope this time is no exception.
Original article published at www.uncsd2012.org