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Plan B 2.0: Rescuing a Planet Under Stress and a Civilization in Trouble

Chapter 12. Building a New Economy: The Environmental Revolution

Restructuring the global economy according to the principles of ecology represents the greatest investment opportunity in history. In scale, the Environmental Revolution is comparable to the Agricultural and Industrial Revolutions that preceded it.

The Agricultural Revolution involved restructuring the food economy, shifting from a nomadic life-style based on hunting and gathering to a settled life-style based on tilling the soil. Although agriculture started as a supplement to hunting and gathering, it eventually replaced it almost entirely. The Agricultural Revolution eventually cleared one tenth of the earth’s land surface of either grass or trees so it could be plowed and planted to crops. Unlike the hunter-gatherer culture that had little effect on the earth, this new farming culture literally transformed the earth’s surface. 66

The Industrial Revolution has been under way for two centuries, although in some countries it is still in its early stages. At its foundation was a shift from wood to fossil fuels, a shift that set the stage for a massive expansion in economic activity. Indeed, its distinguishing feature is the harnessing of vast amounts of solar energy stored beneath the earth’s surface as fossil fuels. While the Agricultural Revolution transformed the earth’s surface, the Industrial Revolution is transforming the earth’s atmosphere.

The additional productivity that the Industrial Revolution made possible unleashed enormous creative energies. It also gave birth to new life-styles and to the most environmentally destructive era in human history, setting the world firmly on a course of eventual economic decline.

The Environmental Revolution resembles the Industrial Revolution in that each is dependent on the shift to a new energy source. And like both earlier revolutions, the Environmental Revolution will affect the entire world.

There are differences in scale, timing, and origin among the three revolutions. Unlike the first two, the Environmental Revolution must be compressed into a matter of decades. The other revolutions were driven by new discoveries, by advances in technology, whereas this revolution, while it will be facilitated by new technologies, is being driven by our need to make peace with nature.

As noted earlier, there has not been an investment situation like this before. The $1.7 trillion that the world spends now each year on oil, the leading source of energy, provides some insight into how much it could spend on energy in the eco-economy. One difference between the investments in fossil fuels and those in wind power, solar cells, and geothermal energy is that the latter are not depletable. 67

For developing countries dependent on imported oil, the new energy sources promise to free up capital for investment in domestic energy sources. Not many countries have their own oil fields, but all have wind and solar energy waiting to be harnessed. In terms of economic expansion and job generation, these new energy technologies are a godsend. Investments in energy efficiency will grow rapidly simply because they are profitable. In virtually all countries, saved energy is the cheapest source of new energy.

There are also abundant investment opportunities in the food economy. It is likely that the world demand for seafood, for example, will increase at least by half over the next 50 years, and perhaps much more. If so, fish farming output—now 42 million tons a year—will roughly need to double, as will the investments in fish farming. Although aquaculture’s growth is likely to slow from the 9 percent a year of the last decade, it nonetheless presents a promising investment opportunity. 68

A similar situation exists for tree plantations. As of 2000, tree plantations covered some 187 million hectares. An expansion of these by at least half will be needed both to satisfy future demand and to reduce pressures on natural forests. 69

No sector of the global economy will be untouched by the Environmental Revolution. In this new economy, some companies will be winners and some will be losers. Those who participate in building the new economy will be the winners. Those who cling to the past risk becoming part of it.

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ENDNOTES:

66. Total land area is 13.1 billion hectares, arable land is 1.4 billion hectares, according to FAO, FAOSTAT Statistics Database, at apps.fao.org, updated 4 April 2005.

67. Oil expenditures calculated from petroleum demand and price per barrel from DOE, EIA, Short-Term Energy Outlook—August 2005 (Washington, DC: 2005).

68. Aquaculture growth calculated from FAO, op. cit. note 62.

69. Plantation area from FAO, Forest Resources Assessment (FRA) 2000 (Rome: 2001), p. 402.

 

Copyright © 2006 Earth Policy Institute