Ecological Debt

Introduction

While the External Debt is an acknowledged problem, Ecological Debt is a relatively new idea, probably due to the fact that politically, more importance has been placed on financial issues than on the loss of natural heritage.

The living standard of the industrialised 'Northern' countries owes a great deal to the massive flow of natural resources and work (either as slave or underpaid labour) of the countries which make up the 'Third World', Southern or developing countries of Africa, Latin America and Asia. The recompense paid by Northern countries to Southern countries has never taken into account the social and environmental damage caused by this exploitation. In effect, the impoverished countries of the South have subsidised and are continuing to subsidise the rich countries of the North through the provision of raw materials, commodities and labour.
The current economic situation entrenches these forms of exploitation through mechanisms such as the International Monetary Fund (IMF), World Bank and World Trade Organisation (WTO) which dictate global economic policies that maintain these systems of dominance through the mechanisms which have become better understood through the campaign to cancel External Debt.

Ecological Debt refers to Œthe cumulative responsibility of industrialised countries for the gradual destruction of the planet caused by their production & consumption patterns¹. Natural wealth extracted by the North at the expense of Southern people has contaminated their natural heritage and sources of sustenance. Ecological Debt also includes the cost of the human energy of the people of the Southern countries.

The relationship between External Debt and Ecological Debt has two main aspects. Firstly, there is the claim to Ecological Debt, which involves accounting for exports undervalued, due to not taking into account associated environmental and social costs. The second is that servicing External Debts, and fulfilling Structural Adjustment Plans (SAPs) leads to even greater destruction of the environment, due to the demands for increasied export of natural resources which requires further exploitation of the environment and an increasing reliance on these types of production models.

Colonisation

During the colonial period European countries took of the lands of the New World, as well as specific products of these lands like gold, silver, precious stones, wood, genetic resources (potato, corn, tomato, beans and others). These were used for the benefit of Western Europe and taken without any payment or acknowledgement of previous husbandship. In many instances, the European conquerers also imposed the payment of tithes onto local communities.

The result of the colonisation period was the death and slavery of indigenous people. At the time of the arrival of the Spanish conquerors, the population of the native people of the Americas was at least 70 million, although it¹s possible that the native population was as high as 180 million. A century and a half later the indigenous population had been reduced to three and a half million.

The extraction of resources facilitated the Industrial Revolution, which in turn exacerbated the exploitation of the lands and people of Southern countries.

The Industrial Revolution

The Industrial Revolution accelerated the process of extraction of natural resources. From that time, until now, countries of the Third World have supplied industrialised countries with these goods through what is a fundamentally unequal exchange due to the price of the extracted resources not taking into account the social or environmental damage caused on both a local and global level by the process of extraction of the exported goods.

The situation since colonisation and the Industrial Revolution has actually become worse. Southern countries could now be considered Œneo-colonies¹ of industrialised nations, and of transnational corporations, whose budgets dramatically exceed those of many Southern countries.
The Ecological Debt was therefore initiated during the colonial era but continues to increase under a form of modified colonialisation.
The extraction of natural resources

The terms of trade associated with the extraction of resources continue to be ecologically unequal as goods are still exported without taking into account the social and environmental damage caused by their extraction and production. While there is some discussion in the industrialised countries about applying the user pays principle to production of products and ecological taxation in order to better reflect the costs of particular products by externalising the costs, this consideration has been absent from debate at the global level about resource transfer between the North and the South.

Transnationals

Transnationals based in the North have set up in developing countries due to the availability of cheap labour, the lack of controls on social and environmental impacts, the availability of natural resources and the presence of local politicians who favour foreign investment. These transnationals are responsible for a host of ecological disasters. The current corporate-defined model of globalisation being advocated by bodies like the World Economic Forum increase the power and hence the impacts of these corporations.

For example, Ecuador, although not a Heavily Indebted Poor Country (HIPC) had a debt of $15.1 billion in 1998, or 82 per cent of its GDP, making it one of the most severely indebted countries in Latin America. Ecuador is one of the richest countries in the world in terms of ecosystems and species diversity. It has up to 25,000 vascular plants and therefore has the highest number of species per area in South America. Animal diversity is also extraordinary, with more than 2,500 species of terrestrial vertebrates. Ecuador¹s natural resources (oil, minerals, wood & marine life) form, with bananas, the basis of its export economy. These resources are being exploited to increasing degrees. For example, Ecuador has suffered the highest rate of deforestation in South America over the past 30 years.

Over a twenty year time frame, Texaco extracted more than 1000 million barrels of petroleum from Ecuador. As a result one million hectares of tropical forest was destroyed, 16.8 million gallons of petroleum and 19,000 million gallons of liquid waste were dumped into the Amazon River system, 235,000 million cubic feet of gas was burnt off and irredeemable damage was done to the indigenous communities. Despite this, resource exploitation has increased in recent years, with new development bank loans and a structural adjustment program (SAP) which emphasises resource extraction as a way to service its external debt. Oil production is argueably the Œledger¹ where the North is continuing to accrue it¹s ecological debt at the greatest rate and having the greatest environmental impact on the South.

One of the main requirements of the SAP has been the introduction of new laws which favour export-driven policies. The result is that Ecuador, along with most other South American countries is increasing its level of mining activity. In fact, in 1996, the stated goal of the Ecuadorian Government was to increase the level of mining from 1% to 10% of its GDP.

Ancestral Knowledge & Agricultural Exploitation

Another way in which the Ecological Debt of the North to the South continues to grow is through the appropriation and use of ancestral intellectual knowledge related to the use of seeds, medicinal plants and other traditional knowledge which continues to be used without payment by biotechnology companies and agro-industries. Developing countries then have to pay royalties for the use of the resultant Œtechnology¹ which is sold back to the South as commodities.

The former Secretary of State of the US, Warren Christopher, estimated the value of the germ plasm of foreign corn to the US economy at US$7 billion. It is expected that this will continue to increase during the 21st century.
Bio-piracy, or the stealing of genetic material from communities in the gene-rich developing countries is an exploding issue in Asia.

Industrialised countries want ownership rights over the biodiversity of the South. In a sense, this goes back to the colonial era, when countries such as England and the Netherlands took control over crop resources in Asia to build up their trade empires of cotton, sugar, tea, rubber, pepper, et cetera.

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) was signed at the end of the GATT Uraguay Round in 1994 and came into force in 1995. It is now administered by the World Trade Organisation (WTO). TRIPs was strongly resisted by the South, as it forces all WTO member states to extend intellectual property rights to plant varieties, the basis of food security and health care. Previously Asian countries have prohibited patents on life forms.

Rice & IRRI

In India in 1998 hundreds of Indian farmers, exasperated after several years of protest against American patents on turmeric, neem and other indigenous resources rallied in the streets of New Delhi to denounce a US patent on Basmati rice. Soon afterwards the same situation arose in Bangkok ­ American companies claimed intellectual property control ­ patents, trademarks and plant breeder¹s rights - over Thailand¹s Jasmine rice.

Rice is synonymous with food security in most parts of Asia. Farmers developed and conserved an enormous amount of genetic diversity in rice over millennia. Some scientists estimate that rural communities have generated over 140,000 rice varieties. Almost 80,000 of them are presently stored in the genebank of the International Rice Research Institute (IRRI) - the largest collection of rice in the world.

Much of this diversity, and the communities¹ knowledge ingrained in it, has disappeared over the past forty years. Until 1960 the rice cultures of Asia were securely under the control of local peoples. Since then IRRI, which is based in the Philippines, has virtually taken over. IRRI is an international agency funded through the Consultative Group on International Agricultural Research which operates from the World Bank. Ostensibly it aims to develop new strains of rice to raise rice yields and incomes in Asia. Rice strains were developed to respond well to chemical inputs such as fertiliser and pesticides, but yields quickly stopped increasing, the environment became polluted and farmers are caught in the spiral of external debt. As the prominent environmental activist Vandana Shiva noted (1991) the green revolution, which was designed as a ³technological strategy for peace, through the creation of abundance² has instead brought ³diseased soils, pest-infested crops, water-logged deserts, and indebted and discontended farmers².

In theory, IRRI¹s internal policies state that seeds from the genebank should not be patented, but once breeding work is done, the material can be patented! The recent controversy over the patent by US firm RiceTek on Basmati rice provides an example ­ RiceTek got its Basmati lines from IRRI which had sourced them from India and Pakistan. Now they are patented in the US. There are already some 160 biotech patents on rice in the world, most of them held by transnationals in the US and Japan.
Other examples of indigenous medicinal and food plants affected by TRIPs are:

• Yves St Laurent securing a patent for liang-liang flowers from the Philippines to make perfume
• Thailand¹s Plao-noi, the healing properties of which have been recorded in Thailand¹s palm leaf books for centuries, being patented by Sankyo, the second largest pharmaceutical firm in Japan
• The process of making tempeh, a unique part of Java¹s culinary heritage, has also been patented in Japan.

Export Monocultures

The use and degradation of the best land and water, plus the use of under-valued human energy for export crops, such as coffee, bananas and flowers, continues to put at risk the food and cultural sovereignty of both local and national communities in many parts of the world.

In broad terms, it can be said that export crops from monocultures reduce the biodiversity of southern countries, are input-intensive, requiring pesticides and herbicides not used in traditional farming methods, and are destructive in terms of labour abuses and human rights violations. This is true of both animal raising (such as where tropical rainforest is cleared for pasture), and plant and fibre production (fresh fruit and vegetables and the creation of plantations on pre-existing farmland).

Bananas

As with most monoculture, the intensive and indiscriminate use of pesticides in banana plantations, such as those in Costa Rica, has numerous side-effects ­ contamination of surface and ground water, poisoning of workers and their families, and wildlife, as well as generation of large amounts of waste, erosion and forest destruction. In addition, plantation employees are paid low salaries and in order to avoid paying social benefits, are usually employed as short-term or casual laborers. Banana production has long been in the hands of foreign, mostly US-based multi-nationals. Although 50% of plantations in Costa Rica are now owned nationally, three companies control the majority of the remainder of the trade.

The imposition of monocultures under the control of a few large corporations world wide destroys the cultural and biological diversity created by local communities over millennia.

Carbon Debt & Greenhouse Gas Emissions

Industrialised countries continue to emit massively disproportionate quantities of greenhouse gases which are the main cause of global climate change. Industrialised countries have also illegitimately appropriated the atmosphere, oceans and vegetative carbon sinks, as these soak up the carbon emitted.

It was the industrial development at the heart of the colonial economic expansion which began the steady build-up in greenhouse gas emissions which is now causing human-induced climate change. The UN Framework Convention on Climate Change (UN FCCC) calls for a limit to greenhouse gas emissions to Œa level that would prevent dangerous anthropogenic interference with the climate system.¹

Based on the 1990 target for climate stabilisation, everyone in the world would have a per capita allowance of carbon of around 0.4 tonnes per year. However, as time passes our failure to live within our emissions budget means that that allowance shrinks. Today, of course, all industrialised countries exceed that target many times over. In a report entitled ŒWho Owes Who ­ Climate Change, Debt, Equity and Survival¹ released by Christian Aid in the UK, the hypothesis is put forward that Œrich countries, with much smaller populations and much higher energy use per person, are running up a huge carbon debt to the poor and less industrialised countries.¹

This inequality is exacerbated by the fact that developing countries are the ones which will suffer most from the catastrophic weather conditions caused by climate change. For example, flooding of the Yangtze River in China in 1998 caused losses estimated at US$36 billion dollars. Simultaneously 45 countries around the globe were hit by severe drought. Small island states, coastal areas and river deltas are most at risk from climate change. Threatened areas include approximately one third of crop land. Hurricane Mitch, which hit Central America in October 1998, killed approximately 10,000 people, and another 9,000 were Œmissing¹. Nearly 3 million people were displaced or severely affected and 126,000 homes were destroyed. The total cost of the damage was estimated at US$3.8 billion, or 70% of the countries income.

Although calculations concerned with climate change are beset with uncertainty it is still possible to estimate the scale of debt owed by rich to poor countries. The unequal use of the global atmospheric commons indicates again how the poor are, in fact, subsidising the rich. The climate system is owned by no one and needed by everyone and is being degraded by the pollution of a minority for the which the majority suffer.
The idea of Carbon Debt is based on the same theory as that of Ecological Debt. That is, those countries that are using more than their fair share of carbon allocation are running up a debt to those countries that are using less than their fair allocation.

Toxic Dumping

The production of chemical and nuclear weapons by Northern countries also continues, with toxic residues being dumped in Third World countries, as this is a cheaper option than recycling them.

The practice of industrialised countries trading or transferring toxic waste, either Œlegally¹ or illegally, to newly industrialising countries is well documented. The mountains of waste produced in the Northern countries include industrial incinerator ash, old non recyclable tyres, sewage sludge, lead batteries and radioactive waste. Chemicals such as tetraethyl lead, DDT and asbestos which are banned in developed countries are exported routinely to developing countries where they are responsible for birth defects, cancer and other forms of dysfunction, disease and eventual death.

The most blatant offences have been the export of toxic wastes from OECD to non-OECD countries. Recently a ban on this type of toxic trade, called the ŒBasel Convention on the Transboundary Movement of Hazardous Waste¹, has been implemented but many countries, including Australia, are objecting to parts of the ban.

There is economic pressure on poorer countries to import toxic wastes. The pressure which was supposed to be placed on industry and governments in the North by the public has had the effect of causing waste generators to export the problem to the Third World and Eastern Europe. It is important to keep in mind that this kind of economic pressure to import hazardous wastes could not have been brought to bear if not for the inequalities in wealth which exist. Due to the increasing burden of External Debt, combined with falls in commodity prices, less industrialised nations are under extreme pressure to accept Œtrash for cash¹. Contracts offering many millions of dollars to debt ridden countries have been commonplace. In 1988 the government of Guinea-Bissau, one of Africa¹s poorest nations briefly agreed to accept over 15 million tonnes of toxic waste over five years for a sum equivalent to four times its Gross National Product.

In addition, because of their more lax environmental and worker safety standards, developing countries are seen as pollution havens by transnationals seeking new markets for their environmentally destructive technologies and processes which are now discredited in the industrialised world.

Quantifying and Claiming the Ecological Debt

The notion of quantifying the Ecological Debt does not imply exchanging debt for nature, or exact quantification. Of course, such a debt is impossible to quantify. For example, the export of wood from tropical rainforests involves the past and continuing loss of biodiversity which has not even been catalogued, and could never be valued in monetary terms. Nonetheless, it is still useful to express the Ecological Debt using monetary terms.

The components of the Ecological Debt therefore are:

Regarding Ecologically Unequal Trade:

• The costs of reproduction or maintenance of exported renewable natural resources which have not been paid (eg the replacement of nutrients incorporated into agricultural exports)
• The costs of future lack of availability of destroyed natural resources, for example oil and minerals no longer available, or biodiversity destroyed
• Compensation not paid for local damage produced by exports, for example sulphur dioxide caused by copper smelters, mine tailings, health effects of flower exports.

For lack of payment of environmental services:

• Unpaid compensation for the impacts of importing toxic wastes
• The value of gaseous residues absorbed by the atmosphere without costs
• The value of the information and knowledge of genetic resources given freely when commercial use has been made of them

Conclusion

The North has a case to answer. Its exploitation of the people, ecology and climate means that it has a greater debt to the poor countries and global community than poor countries do in reverse through the external debt. Yet the lethal traffic in debt is still one way. Foreign debt kills in the least developed countries as its costs undermine investments in health and education. The Rio Declaration signed at the Earth Summit in 1992 called on governments to include environmental costs in their accounting saying that Œthe polluter should in principle, bear the costs of pollution.¹ It is time for rich countries to face up to the obligations they bear because of their enormous Ecological Debts. The first step is the cancellation of poor countries¹ unpayable financial debts as they are simply illegitimate to pursue.

The World Bank and IMF talk about Œstructural adjustment¹ in monetary terms. Increasingly there is an international feeling that what we really need is adjustment to sustainable lifestyles. If developing countries have to undergo structural adjustments in terms of financial problems and the External Debt, industrialised countries should also have to go through a structural adjustment process to a more sustainable way of life to qualify for relief of the Ecological Debt.

Environmental Justice & Environmental Security

The concept of 'Environmental Justice' has traditionally refered to the disproportionate amount of pollution and environmental destruction in areas occupied by minority and low income people in the 'developed' countries. This concept is beginning to be seen in an international as well as local context. 'Environmental Security' refers to guaranteed access to natural resources and environmental services for all, not just the rich and the powerful.

The pursuit of Environmental Justice and Environmental Security has the potential to go some way to pursuing ecological adjustment in the North.

Ecological Debt as a Campaign

At the last AGM of Friends of the Earth (International) held in Quito, Ecuador in November 1999 an advocacy program was launched for the recognition and payment of the Ecological Debt. This initiative has a number of objectives:

• To stop the increase of the ecological debt
• To restore the areas in southern countries affected by the extraction of natural resources and export monocultures so that local and national communities are able to recover their capacity for self-sufficiency
• To repatriate cultural and natural heritage
• To restore areas affected by climate change, reduce CO2 emissions and totally eliminate ozone depleting products
• To eliminate all weapons, products and toxic substances that threaten life on the planet

The concept of Ecological Debt was been identified by Friends of the Earth (Australia) as a campaign priority area for this year.

References:

This paper is a compilation of information from the following sources:

Amador, M (1996): ŒRotten Bananas ­ Plantations Corporations and Trade in Costa Rica¹ in Link November/ December 1996, Friends of the Earth (International)

Bassey, N (1997): ŒOily Business ­ A Pollution Tour Through Latin America¹ in ŒLink¹ September/ October 1997, Friends of the Earth (International)

Buitron, R (1996): ŒMining Obeys No Laws in Ecuador¹ in Link March/ April 1996, Friends of the Earth (International)

Donoso, A and Walker, C (1999): ŒExternal Debt, Ecological Debt, Who Owes Who?¹ Environmental Justice, Friends of the Earth (Australia)

Martinez-Alier, Joan (1999): ŒEcological Debt vs External Debt: A Latin American Perspective¹, Acción-Ecológica, Ecuador

Médard, A (1996): ŒDumping By Another Name in Haiti¹ in ŒLink¹ November/ December 1996, Friends of the Earth (International)

Shiva, V (1991): The Violence of the Green Revolution: Third World Agriculture, Ecology and Politics. Third World Network. P 11- 12.

Walker, C (2000); La Resistencia, Resistance as a Strategy for Sustainability in Arena magazine, #47, June ­ July 2000.

Genetics Resources Action International (http://www.grain.org)

ŒBiopiracy, TRIPS and The Patenting of Asia¹s Rice Bowl ­ A collective NGO situationer on IPRs on rice¹, http://www.grain.org/publications/reports/rice.htm, 1998

ŒNo Patents On Rice! No Patents on Life! Statement from peoples¹ movements & NGOs in Southeast Asia to the WTO¹, http://www.grain.org/publications/reports/rice.htm, 1998

ŒThe Veins Opened by the North Haven¹t Healed¹, press release April 2000, Deuda Ecologica/ Ecological Debt, http://www.cosmovisiones.com/DeudaEcologica/n_nefer.html
http://www.jubilee2000uk.org/profile/ecuador.html

Climate Change and the Ecological Debt, Acción Ecológica, http://www.foei.org/campaigns/ClimateChange/trade_debt_climate.html

ŒWho owes who ­ Climate Change, debt, equity and survival¹, Christian Aid, 1999

http://www.greenpeace.org/~toxics/

http://www.ban.org (Basel Convention)

No More Plunder: They Owe Us the Ecological Debt. Bulletin of Accion Ecologica, October 1999. Issue # 78.

For more information:

Contact FoE Melbourne
Ph: 03 9419 8700
Email: foe@melbourne.foe.org.au

or the Campaign for the Recognition and Claim for the Ecological Debt.
Aurora Donoso.
Accion Ecologica/ FoE Ecuador,
Alejandro de Valdez N24-33 y La Gasca,
Casilla 17-15-246C, Quito, Ecuador.
Email: institute@hoy.net
Web: http://www.ecuanex.net.ec/accion

Produced by Tristy Fairfield and Cam Walker for Friends of the Earth (FoE) (Melbourne), August 2000.