Locked in

Before the Credit Crunch of 2008 I produced a slightly silly little book called "50 ways to Stuff the Planet". The 43rd way was all about debt and economic growth

Forty three Get into debt.

Money is wonderful stuff. If a nation starts running out, it just prints some more. Only trouble is, if you’ve got more money chasing the same amount of stuff then prices go up and you get inflation. But, if the overall size of the economy grows, then you can avoid inflation by having more stuff for the extra money to chase. Indeed, if you can make more stuff more cheaply then prices can even start to fall, just as they have for computers and other electronic gizmos.

When you get into debt, you’re effectively paying for stuff today out of what you anticipate you’ll earn tomorrow. The debt can be paid off in two ways. Either you accept that you’ll make do with less stuff in the future or you get yourself a wage increase so you can pay off the debt and still keep on consuming at the same rate.

Inflation really is a bit of an arse and most countries will do what they can to avoid it. So, one of the best ways of making sure that we keep on going for economic growth, keep on making more and more stuff, keep on emitting even more greenhouse gases, is to get yourself, and your country, into debt.

What’s the damage?

Put six economists in the room and they’ll give you a dozen different answers, because they can’t even agree even with themselves. Safe to say, they’ll all agree that if the economy isn’t growing then it’s actually going backwards.

Even if you don’t pay your bills and go bankrupt, the economy as a whole still has to. If a bank writes off your debt you can rest assured they’ll screw the money out of someone else.

Can I be arsed?

Again, it’s more a case of can I be arsed not to. Just think of all the junk mail inviting you to get another credit card, of all the store cards stuffed in your wallet, think of Carol Vorderman’s warm words on daytime telly.

Wind-up-ability

To be honest, absolute pants. But you’ll know you’re doing your bit to keep the runaway train on its track just that little bit longer.

Two more recent pieces of work reminded me of these observations. Just as escaping from debt locks us into future economic growth, and hence very likely into increased emissions, so too does our investment in machines powered by fossil fuels and investment in fossil fuel reserves themselves.

Firstly, when something gets made that's going to convert energy from one form to another, like a car, a heating system or a power station, then its likely that that's what it will do and likely that it'll do it for the rest of its expected life. A report by the International Energy Agency in 2012 pointed out that  If action to reduce CO2 emissions is not taken before 2017, all the allowable CO2 emissions [to keep warming below 2C]  would be locked-in by energy infrastructure existing at that time. So, unless we rapidly change our investment strategies we will find out what happens when the planet warms by at least 2C.

Secondly, a recent study by the think tank Carbon Tracker points out that, despite the fact that its well known that to keep global warming below 2C we've got to leave at least 60% of our known fossil fuel reserves in the ground, there are still huge institutional and private investments being made into the discovery of resources which, if we really are taking Climate Change seriously, can never actually be exploited. The big oil companies are effectively gambling on us not taking serious action and locking us into a financial showdown. 

With these forces at play, and the current price of CO2 on the European Emissions Trading Scheme at less then 3 euros per tonne (where the Stern Review suggested that the social cost was at least 10 times this), it really does seem that the greatest experiment we've ever played with our eco-system will be carried through to the bitter end.