We all share in the natural bounty of the earth. We have a mutual responsibility for preserving the integrity of creation. During this third year of the Canadian Ecumenical Jubilee Initiative, we are grappling with what it means to restore "right relations with the earth" as well as continuing our work on international debt. In doing so, we are discovering new dimensions to the concept of indebtedness.  
    Our relationship with the life-sustaining earth entails several kinds of debt. First, there is the debt we owe to the earth for the sustenance it offers to us and to all living beings. Secondly, there is also the debt "we owe to the earth for the damage we have inflicted on it. The first of these debts we can never repay; the other we defer at our own peril." (CEJI 2000:3) Thirdly, we owe a debt to marginalized and impoverished people, especially Indigenous peoples, who are most often the first victims of environmental destruction.  
    Eco-theologian Thomas Barry refers to the second kind of debt as the "earth deficit ... involved in the closing down of the basic life system of the planet through abuse of the air, the soil, the water, and the vegetation." (CEJI 2000:3) Responsibility for this earth deficit is distributed unevenly. The well-to-do appropriate a disproportionate portion of the planet’s carrying capacity. The minority who overexploit the global commons owe a debt, not only to the earth, but also to the majority who consume less than their fair share of the earth’s resources. 
    Our partners in Jubilee South call this latter kind of debt "ecological debt" referring to the responsibility held by those who live in industrialized countries for the continuing destruction of the planet due to their production and consumption patterns. During the first two years of the Canadian Ecumenical Jubilee Initiative, we explored in depth the financial debt owed by countries of the South to their Northern creditors. In our earlier reports (Dec. 1997 and May 1999), we describe in detail the origins and consequences of this debt and the rationale for its cancellation.  
    In our journey over the last two years, our understanding of the financial debt has deepened. We no longer speak only of "the unpayable debt of the poorest countries". Increasingly we have focused on the ethical case for the annulment of the illegitimate debts of all developing countries, not just the poorest. Illegitimate debts include those that cannot be serviced without placing a burden on impoverished people, those which were contracted for fraudulent purposes or wasted on projects that never benefited the people, and debts that grew due to the compounding of interest payments after Northern countries unilaterally raised interest rates.  
    The concepts of illegitimate financial debt and ecological debt are closely related as we shall see later in this report. Our examination of ecological debt adds another dimension to the moral grounds for canceling the financial debts.  
    The ecological debt can be analyzed from a number of valid perspectives. Some analysts speak tellingly of "environmental racism", unmasking the fact that people of colour and minority groups, particularly Aboriginal peoples, suffer more than others from ecological devastation. Elements of this analysis are incorporated into this report. Similarly, the ecological debt could be examined through a gender or a class analysis showing how women and working people are particularly affected by environmental degradation.  
    In this report, we shall examine ecological debt primarily from a South - North perspective. We adopt this perspective consciously in solidarity with our partners in the South who have been talking about ecological debt for many years. Unfortunately, their voices have not been heard in a world mesmerized by financial statistics.  
    We begin this report by identifying ourselves with the perspective of our partners in Acción Ecológica of Ecuador who define ecological debt as: "the debt accumulated by Northern, industrial countries toward Third World countries on account of resource plundering, environmental damages, and the free occupation of environmental space to deposit wastes, such as greenhouse gases, from the industrial countries." 
   Using this definition, the poor of the Third World are the principal creditors of the ecological debt. The debtors are the wealthy of this planet. According to the United Nations Development Program (1998:2-4), the 20% of the world’s population living in the highest income countries make 86% of all consumer purchases while the poorest fifth buy a minuscule 1.3%. The richest fifth consume 58% of all the energy used by humans while the poorest 20% use less than 4%. The high-income fifth account for 53% of carbon dioxide emissions, the poorest just 3%. 
    Those who abuse the biosphere, transgress ecological limits and enforce unsustainable patterns of resource extraction must begin to discharge this ecological debt, first of all, by canceling the financial debt owed by developing countries to Northern creditors. This Report will support this position by examining the origins of ecological debt and its relationship to financial debt and by studying some of the estimates of the size of the debt which the North owes the South. 

How did the Ecological Debt Accumulate? 

Following upon Acción Ecológica’s definition of ecological debt, we can justifiably say that the peoples of the Third World deserve redress for debts accumulated through:  

• the extraction of natural resources (petroleum, minerals, and marine, forest and genetic resources) that damages the basis of survival of Southern peoples;
• ecologically unequal terms of trade whereby goods are exported without taking into account the social and environmental impacts of their extraction or production;
• the looting, destruction and devastation during the colonial period (including slave labour, genocide and cultural genocide);
• the appropriation of traditional knowledge relating to seeds and medicinal plants upon which biotechnology and modern agro-industries are based;
• the degradation of the best lands and marine resources used for export production putting at risk food self-reliance and cultural sovereignty of Southern communities;
• the contamination of the atmosphere by industrial countries through excessive emissions of greenhouse and ozone-destroying gases causing climate change; 
• the disproportionate appropriation of the carbon dioxide absorption capacity of the world’s oceans and vegetation;
• the production of chemical weapons and nuclear weapons which are often tested in the South;
• the dumping of toxic wastes and the sale of pesticides banned in the North in the Third World.

(adapted from Aurora Donoso "No more looting!" 2000:2)

• the financial debt;
• Structural Adjustment Programs;
• foreign investment;
• raw material prices that exclude the ecological cost of their production or are less than the cost of producing sustainable alternatives (e.g., petroleum priced below the cost of sustainable production of ethanol from biomass);
• unequal exchange of products with extensive environmental costs (e.g. soil degradation) for products that are less damaging to the environment;
• the bioengineering of seeds and plants to make them dependent on chemicals;
• Trade-Related Intellectual Property Rights (TRIPS) within the WTO and NAFTA which protect the patenting of genetic material for agriculture or pharmacology by Northern transnational corporations without compensation to the original guardians of biodiversity in the South.

The demand by financial creditors that Third World nations repay unsustainable debt (combined with the imposition of Structural Adjustment Programs), compels them to undertake ecologically destructive practices to meet their debt payments. The debtor countries have no choice but to produce products for export far beyond what is needed for their own populations. Such overproduction for export is aggravating the following ecological trends:  

• rapid deforestation destroying biological diversity and turning vast tracks of land into virtual desert. "Since 1970 the wooded area per 1,000 inhabitants has fallen from 11.4 square kilometres to 7.3." (UNDP 1998:4)
• use of the best land for export crops forces peasants onto marginal lands. For example, farming on steep hillsides vulnerable to erosion contributed to recent deadly mudslides in Honduras, Nicaragua and Venezuela.
• increase in pesticide and chemical fertilizer use. For example, the banana industry in some countries makes use of the pesticide DBCP which causes male sterility. 
• destruction of mangrove swamps for shrimp farming, making coastal areas more vulnerable to flooding. In Ecuador 70% of mangrove forests have been cut down to make way for shrimp farming, affecting the livelihood of traditional fishers and aggravating flooding by storms resulting from the El Niño phenomenon. 
• wasted fuel, deterioration in nutritional quality and greater use of chemical preservatives due to long-distance transport of food.
• substitution of tree farms and monoculture for biological diversity: Forestry monoculture harvests commercially valuable wood and destroys the rest as "weeds" and "waste". "This ‘waste’", comments Vandana Shiva (1993:24) "is the wealth of biomass that maintains nature’s water and nutrient cycles and satisfies needs of food, fuel, fodder, fertilizer, fibre and medicine of agricultural communities."
• over-fishing: "[World] fish stocks are declining with about a quarter depleted or in danger of depletion and another 44% being fished at their biological limit." (UNDP 1998:4)
• destruction of natural habitats and human livelihoods as a result of damage from petroleum extraction. For instance the damage wrought by Shell Oil in the Niger Delta, the home of the Ogoni people.

Can the Ecological Debt be Quantified? 

Attempts to compare the ecological debt with its financial counterpart present a number of dilemmas. While insurance companies try to place a monetary value on human life, the intrinsic worth of a human being or of the biosphere as the sustainer of all life, human and non-human, can never be reduced to mere dollars and cents. 
    Professor Joan Martinez Alier uses the example of export of wood from tropical rainforests to explain why an exact quantification of the ecological debt is impossible. Cutting down tropical forests involves a past and a continuing loss of biodiversity which has not even been categorized and whose potential monetary value is unknown. 
    Nevertheless, Martinez Alier (1998) argues that "although it is not possible to make an exact accounting, it is necessary to establish the principal categories [of ecological debt] and certain orders of magnitude in order to stimulate discussion." 
    In this context, it is possible to approximate some aspects of the ecological debt in monetary terms. For example, some of the economic costs of overfishing or deforestation can be quantified. While the estimates cannot be precise, they can at least suggest the magnitude of the ecological debt. 
    Before we describe some of the ways that the size of the ecological debt might be quantified we need to clarify how our approach differs from that of some other groups, beginning with neo-classical economists. 

Rejecting Neoclassical Assumptions 

In our earlier Economic Justice Report "Economics for the Earth" (June 1997) we explain how most mainstream economists take the natural world for granted, assuming that there are no limits to the carrying capacity of the earth or to its ability to absorb wastes from the human economy. One of the explanations for most economists’ blindspot is the limitation imposed by their analytical models which require that everything be quantifiable in monetary terms.  
    Valuing everything, including human life, only in terms of market transactions leads to enormous distortions. An infamous example of this kind of thinking may be found in a memo signed by Lawrence Summers in 1991 when he was chief economist at the World Bank. The internal World Bank memo argues that "the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable." The memo goes on to say "under-populated countries in Africa are vastly under-polluted, their air quality is vastly inefficiently low compared to Los Angeles or Mexico City. Only the lamentable facts that so much pollution is generated by non-tradable industries (transport, electrical generation) and that the unit transport costs of solid waste are so high prevent world welfare enhancing trade in air pollution and waste." 
    This memo constitutes a disturbing example of the racist thinking that leads to environmental degradation. The memo argues that the death of an African due to toxic pollution is less costly in economic terms than the death of a Northern citizen because "the foregone earnings from increased mortality" are less per capita. The memo adds that concern for environmental quality rises with income. Transferring polluting industries to low-income countries would then be "welfare enhancing" since it would augment their money incomes.  
    As John McMurtry (1998:323) observes: "Life itself in this calculus is conceived as being of worth only to the extent of its price…. Disease and death are of no concern except as they cost money. Pollution and toxic waste are not to be prevented, but assigned a money value…. Health and life themselves are to be sacrificed to a higher good, an advanced place in the money order of wealth."  
    Summers’ memo was met with justifiable outrage. José Lutzenberger, then environmental secretary of Brazil, called it "a concrete example of the unbelievable alienation, reductionist thinking, social ruthlessness and the arrogant ignorance of many conventional economists." These remarks cost Lutzemberger his job, while Summers was appointed US Secretary of the Treasury just one year later. (Tavernier 2000:4-5) 
    Economists at the Centre for Social and Economic Research on the Global Environment (C-SERGE) in the U.K. have also displayed similar underlying racism in their analysis. In attempting to estimate the social costs of climate change they valued the life of someone living in a developing country at US$150,000 while saying that a life in the US or Europe was worth US$1,500,000. The different figures were calculated according to peoples’ ability to buy damage insurance. This outrageous attempt to value some human lives as being worth 10 times as much as others sparked an international protest campaign against "the Economics of Genocide". (Global Commons Institute, undated:23) 
    Attempts to estimate ecological debts must begin with different premises: the inestimable value of all life and a recognition of the human economy as a subsystem within the wider ecosystem which itself has an immeasurable worth. 

Debt for Nature Swaps 

Our approach to ecological debt also differs from that of advocates of "debt for nature swaps." Under these exchanges some debtor countries have agreed to set aside a certain amount of ecologically sensitive land in return for remission of part of their financial debt. For example, in 1987 Conservation International, a US environmental group, paid a private bank US$100,000 for the purchase of Bolivian government debt with a face value of US$650,000. (Jiménez Herrero 1989:326) In accounting terms it bought the debt at an 85% discount implying that the bank thought its loan was worth only 15% of its face value. In other words the bank felt that there was only a 15% chance that Bolivia would ever pay this debt. No doubt the bank also counted on receiving tax write-offs to offset part of its loss and some favourable publicity from the transaction. 
    The Bolivian government for its part agreed to add 1.5 million hectares of tropical forest to the Beni Biosphere Reserve. It also agreed to set up a fund in its own currency equivalent to US$250,000 to administer the reserve in collaboration with Conservation International.  
    There are several problems with swaps of this type. They assume that the financial debt is legitimate in the first place. In all likelihood much of the debt on Bolivia’s books in 1987 when the swap was arranged was of questionable legitimacy. A detailed audit of the origins and process of Bolivia’s indebtedness is needed in order to determine:  

• how much was contracted by military dictatorships unaccountable to the people;
• how much was used for fraudulent purposes that never benefited the people;
• how much built up due to the compounding of interest payments after Northern governments unilaterally raised interest rates in the early 1980s.

Ecological Footprints  

One way to approximate the size of the ecological debt that overconsumers of natural wealth owe to underusers is to compare the size of their respective "ecological footprints". Ecological footprints measure how much of the earth’s finite arable land, pastures, forests, oceanic production and carbon dioxide absorptive capacity is consumed by the average person in a given geographic area.  
    The concept of ecological footprints was developed by Rees and Wackernagel to measure how humanity’s consumption patterns compare with the carrying capacity of the earth. The carrying capacity of a given species is the population of that species that can be supported indefinitely in a given habitat without permanently damaging that habitat. Ecological footprint studies show that globally humans are consuming more resources than can be naturally regenerated each year. In other words we are running down the earth’s limited store of ecological capital (mostly the ancient biomass embodied in fossil fuels) rather than living off its annual production of sustainably renewable resources. 
    The size of any particular ecological footprint is based on the average per capita consumption of food, forest products and fuel in a given geographic area. The footprints measure, country by country, the amount of biologically productive area that would be necessary to sustain that country’s resource consumption, and to dispose of its wastes, using prevailing technology.  
    When a country’s ecological footprint is larger than its available ecological capacity, it must "import" carrying capacity from elsewhere and/or deplete its natural capital faster than it can be replenished. It achieves this by actually importing food, fuel or forestry products or by running down its supply of renewable and non-renewable resources (e.g. fossil fuels). It may also "export" wastes such as carbon dioxide emissions in excess of what its vegetation and surrounding oceans can absorb. 
    Since we first discussed the concept of ecological footprints in our June 1997 Economic Justice Report on Economics for the Earth, Wackernagel and colleagues at the Centre for Sustainability Studies at the Universidad Anáhuac de Xalapa in Mexico have refined their methodology. They now make more sophisticated estimates of the use of sea space and of pasture and forest yields. They also make more thorough assessments of consumption and carbon dioxide absorptive capacity. 
    Their earlier work showed that in 1992 humanity as a whole was consuming 25% more than nature can regenerate on a continuous basis. Their updated figures (see Chart 1) paint an even more distressing picture. By 1997 humanity’s average ecological footprint had become 40% larger than the available space for producing food, fuel and forestry products on a sustainable basis. 
    In global terms the most recent data shows that in 1997 the average person had an ecological footprint equivalent to 2.8 hectares of biologically productive land and oceanic space. But the available ecological capacity per person was only about 2 hectares. If we set aside 12% of this available space for the preservation of the 30 million non-human species that share our planet, the available ecological space per person is just 1.7 hectares.  
    An individual country’s per capita ecological footprint may be compared to the size of that country’s carrying capacity or to a world average. A comparison of per capita footprints to each country’s available ecological capacity shows that a geographically large and sparsely populated country like Canada has a larger ecological carrying capacity (9.6 hectares per capita) than our actual ecological footprint (7.7 hectares per person). On the other hand densely populated Bangladesh with an ecological footprint of only 0.5 hectares per capita has an even smaller carrying capacity of just 0.3 hectares per person. 
    Chart 1, based on 1997 population figures, illustrates the per capita ecological footprints of the average person in 25 selected countries in relation to the world average of 2.8 hectares. There is a vast disparity in the amount of the earth’s carrying capacity appropriated by the average person in each country.  
    In global terms, 77% of the world’s population has an ecological footprint that is smaller than the world average. The average footprint of these ecological creditors is just 1.02 hectares. The other 23% of the world’s population, the ecological debtors, occupies 67% of humanity’s footprint. In other words, just over one-fifth of the population uses two third’s of the earth’s carrying capacity. It is these wealthy debtors who are responsible for the fact that humanity as a whole is consuming 40% more resources than can be reproduced sustainably. 
    For each person who uses three times his or her fair share of the earth’s carrying capacity, there are 3 others living on only one-third of their fair share. (See Chart 2). 

Bioprospecting and Biopiracy 

Appropriation of biodiversity and traditional knowledge from Indigenous and farming communities in the South has been occurring for centuries. Many of the crops that are now grown throughout the world were first cultivated by Indigenous and farming communities in the South. No one thought of charging royalties or claiming intellectual property rights over maize from Central America, sugar cane from India, potatoes from the Andes, soybeans from China, coffee from Africa or wheat from the Middle East when they were first transplanted to other continents. Yet the beneficiaries of this transfer of life-sustaining biological knowledge owe a real debt both to the earth and to the original guardians of biodiversity.  
    In our day, the biotechnology industry’s search for living organisms with potentially marketable traits is described as "bioprospecting". Transnational corporations send agents into farming communities to "discover" crop varieties or herbal medicines in developing countries where 84% of the earth’s biodiversity is found. Nowadays bioprospecting involves the collection of plant, animal and microbiological specimens that may or may not have commercial value. It is estimated that only "about one in 10,000 chemicals derived from mass screening of plants, animals and microbes eventually results in a potentially profitable [discovery]." (RAFI 1994:2) 
    To narrow the odds, transnational biotechnology companies rely on the knowledge of Indigenous peoples and local farming communities. Pharmaceutical researchers have been known to collect plants by talking to Indigenous healers and watching them work. Whenever several different communities use the same kind of plant for herbal remedies, the researchers target the plant for further study. (RAFI 1994:2)  
    Biotechnology firms do not just collect plant, animal and microorganism specimens. Bioprospectors also gather DNA samples from humans. They seek populations or tribal groups that may show signs of immunity to particular diseases or have other unique traits. 
    Bioprospecting has become so widespread that the companies involved have begun to offer some monetary compensation to the communities from which they derive their samples. However, the amount of compensation they pay is derisory in comparison with the economic benefits they reap from their "discoveries". Furthermore no compensation was ever paid for hundreds of commercially lucrative products appropriated in the past. 
    The 1992 Convention on Biodiversity sanctions the use of bilateral bioprospecting agreements in the hope that some economic benefits might flow back to the original guardians of biodiversity. The Rural Advancement Foundation International (RAFI), an international non-governmental organization specializing in research on biotechnology issues affecting the South, has investigated a number of these agreements. RAFI (1994:1) reports that "in the vast majority of cases commercial bioprospecting agreements cannot be effectively monitored or enforced by the source communities, countries or by the Convention, and amount to little more than ‘legalized’ bio-piracy."  
    While the Convention on Biological Diversity promotes the "equitable sharing of benefits" from bioprospecting, the reality is that farmers and Indigenous peoples are being offered less than 3% of the profits derived from their knowledge. For example, the US government-financed International Cooperative Biodiversity Group (ICBG) project in Peru offered Indigenous people royalties of between 0.25% and 1% of eventual sales from discoveries made on their land. Meanwhile biotechnology colossus Monsanto and Washington University stand to scoop up the rest of the profits.(RAFI 1997:1)  
    Similarly, Conservation International’s ICBG-funded project in Surinam offers Indigenous peoples royalties of just 2% to 3%, while pharmaceutical giant Bristol Myers Squibb stands to reap the lion’s share of profits from any discoveries. (RAFI 1997:1) 
    The Rural Advancement Foundation International defines biopiracy as "the use of intellectual property laws (patents, plant breeders’ rights) to gain exclusive monopoly control over genetic resources that are based on the knowledge and innovation of farmers and Indigenous peoples." (RAFI 1996:1) 
    A precedent for the paltry amounts that transnational pharmaceutical companies pay for bioprospecting rights was set in 1991, while the Convention on Biodiversity was still under negotiation. That year Merck & Co. offered the Instituto Nacional de Biodiversidad (INBio) in Costa Rica a 2-year research budget worth just over US$1 million, plus a small royalty on net profits from future sales of patented products. RAFI (1994:3) estimates that, "If the Merck/INbio deal were widely replicated, the South’s biodiversity could all be auctioned off for the paltry sum of about $10 million per annum." 
    People in the South have been denied and are still being denied the financial benefits that should rightfully be theirs from the exploitation of their natural resources and the commercialization of their indigenous knowledge. 
    The takeover and patenting of the knowledge of the poor by global corporations is doubly offensive. It creates a situation where the poor have to pay for the use of the seeds or the medicines they themselves evolved and passed on freely from generation to generation. One notorious example is the US patent on basmati rice won by a Texas company, RiceTec Inc., in 1997. RAFI (2000) call this "a classic case of biopiracy. Not only does the patent usurp the basmati name, it also capitalizes on the genius of South Asian farmers who have for centuries selected and maintained basmati rice varieties that are known worldwide for their fragrant aroma, long and slender grain and distinctive taste." 
    As Vandana Shiva (2000) observes: "Global law has enshrined the patriarchal myth of creation to create new property rights to life forms just as colonialism used the myth of discovery as the basis for the takeover of the land of others as colonies. Humans do not create forms when they manipulate it. Rice Tec’s claim that it has made ‘an instant invention of a novel rice line’... denies the creativity of nature ... and the prior innovation of the Third World communities. ... When patents are granted for seeds and plants, as in the case of basmati, theft is defined as creation, and saving and sharing seed is defined as theft of intellectual property. Corporations which have broad patents on crops such as cotton, soybean, mustard are suing farmers for seed saving and hiring detective agencies to find out if farmers have saved seed or shared it with neighbours... Sharing and exchange, the basis of our humanity and of our ecological survival has been defined as a crime." 

Estimating the Biological Debt 

What is the economic value of the biological knowledge appropriated from the Third World? Once again it is not possible to establish a precise figure. However, a number of estimates have been made of the contribution that Southern biological resources and indigenous knowledge already make to Northern economies. 
    RAFI (Nov. 1994) estimates that medicinal plants and microbials from the South contribute at least US$30 billion a year to the North’s pharmaceutical industry. These calculations are for past appropriations. The value of future discoveries is literally incalculable. 
    Demanding fair compensation (whether in the form of annual royalties or other payments) for biological material found in the South is not the same thing as saying that biodiversity has only a monetary value. Nevertheless it is entirely just to demand that a portion of the ecological debt be discharged by fairly compensating the peoples of the South for the wealth generated by exploiting their knowledge and generations of care for the earth’s biodiversity.  

Carbon Debt 

Scientists overwhelmingly agree that climate change is already occurring as a result of increased concentrations of carbon dioxide (CO₂ ) and six minor greenhouse gases in the atmosphere. The average global temperature has risen by one degree Celsius over the past 135 years. Most experts agree that it could increase by another 1 to 3.5 degrees Celsius over the next century. Global warming also entails fractured Antarctic ice shelves, flooded islands and coastlines, and more intense storms. 
    Currently, human economic activity, primarily the burning of fossil fuels, results in the release of twice as much CO₂ into the atmosphere as can be absorbed by the world’s "carbon sinks", that is the capacity of land-based vegetation and marine life to absorb carbon dioxide and release oxygen through photosynthesis. As a result CO₂ concentrations in the atmosphere are increasing. 
    Those who use too much of the carbon dioxide absorption capacity of the world’s oceans, vegetation and soil owe a debt to all living creatures whose habitat is threatened. They owe a particular debt to the carbon creditors, the poor of the South who use less than their fair share of the CO₂ absorption capacity. The poor and Indigenous peoples, such as the Inuit living in Canada’s North, are among those who are likely to suffer the most severe effects of disappearing permafrost, floods, droughts, tropical storms and rising ocean levels brought on by climate change. These consequences of global warming are another manifestation of environmental racism. 
    Chart 3 illustrates how industrial countries’ per capita emissions of CO₂ far outweigh the modest emissions from developing countries. As Joan Martinez Alier (1998:2) observes, the unequal carbon use proceeds "as if the rich had assumed property rights over all the CO₂ sinks: the oceans, the new vegetation and the atmosphere."  
    In 1996 the average Canadian was responsible for three times as much CO₂ emission as the world average. US residents used four times as much as the global average. Clearly it is the responsibility of the carbon debtors, those who use a disproportionate share of the world’s carbon absorptive capacity, to curb their output. 
    At the United Nations conference on climate change in Kyoto in 1997, industrialized countries only agreed to reduce their greenhouse gas emissions after they had "grandfathered" emission rights at 1990 levels. In other words, they chose to ignore the previous history of unequal appropriation of carbon sinks by taking 1990 emission levels as the starting point. Then they only agreed to reduce their emissions by a very modest 5.2% below their 1990 levels by the period 2008-2012. Within this global target Canada and Japan agreed to cut emissions to 6% below 1990 levels, the US 7% and the European Union 8%, while Russia and the Ukraine agreed to stabilize emissions at 1990 levels.  
    These commitments are nowhere near the 60% to 80% reduction that must be achieved, according to the Intergovernmental Panel on Climate Change (IPCC), which represents over 2,000 scientists from 100 countries. While some European countries have begun to reduce their emissions, Canada is discharging 1.5% more CO₂ every year into the atmosphere. 
    While developing countries are signatories to the UN Framework Convention on Climate Change, they did not make specific emission reduction commitments under the Kyoto Protocol. They argued that it is up to the wealthier, industrialized countries to reduce their emissions first. As of July, 2000 only 14 nations, all of them developing countries, have ratified the Kyoto Protocol. It will not become legally binding until it is ratified by 55 nations, including industrialized countries accounting for 55% of the world’s greenhouse gases. (TS 6/07/00:A12) 

Kyoto Protocol Inadequate 

In the negotiations on the climate change convention, the US has consistently demanded that developing countries must also accept emissions limits. By virtue of its constitutional mandate to ratify international treaties, the US Senate is a key player in the politics of climate change accords. Some key US Senators insist that unless there is a measurable participation by developing countries, they will not ratify the Kyoto Protocol. 
    Developing countries, led by India, have raised fundamental questions about the equity of allocating high per capita emission rights to industrialized countries and comparatively low per capita allotments to developing countries. In effect, this practice rewards the carbon debtors for their past profligacy. It is for this reason that developing countries did not make specific reduction commitments under the Kyoto Protocol. 
    At Kyoto, the US insisted on mechanisms to allow a degree of "flexibility" in how countries might meet their emissions targets. They demanded that the Kyoto protocol provide for emissions trading as will be discussed below. Another device for achieving flexibility is a "Clean Development Mechanism" whereby industrial countries can earn credits by financing emissions reduction in developing countries. 
    This whole approach sidesteps two fundamental principles of equity. First of all and most importantly, it fails to recognize the carbon debt built up through the past overuse of fossil fuels by the industrialized countries. Those who are most responsible for the climate change that is already occurring want, in effect, to repudiate their historical carbon debts. Developing countries that have low per capita emissions, the carbon creditors, are being asked to commit themselves to curb future emissions without any recognition of the debt owed to them.  
    Secondly, the Kyoto Protocol ignores the only fair way to ration global emissions which would be to allocate emission rights equitably to everyone, regardless of where they live.  

Contraction, Convergence and Compensation 

Since an equal sharing of per capita emissions cannot be achieved overnight, many ecologists argue that the goal of global equity can only be achieved through a process of contraction and convergence. What this means is that the carbon debtors of the industrial world must contract their overuse of fossil fuels over time to a sustainable level. Convergence "means that each year’s ration of the global emissions budget gets shared out so that every country converges on the same allocation per inhabitant by an agreed date. The rate of this convergence is negotiable." (Meyer and Cooper 2000:4)  
    In light of the historical carbon debt, however, it makes sense to speak of a three-part process of contraction, convergence and compensation for the ecological creditors. Compensation involves some form of payment by the debtors to the carbon creditors as they wait for convergence to occur. 
    Most environmentalists see the Kyoto Protocol as a positive, if modest, beginning. For example, a study by the David Suzuki Foundation and the Pembina Institute (2000:4) says "the Protocol represents only a small first step on the road to the 60-80% reduction in global greenhouse gas emissions that are required to stabilize the atmospheric concentration of greenhouse gases." The Canadian Ecumenical Jubilee Initiative campaign on climate change takes the same position, urging the government to ratify the Kyoto Protocol by spring 2001. 
    Support for ratification of the Kyoto Protocol need not blind us to its limitations and deficiencies. Its targets for emissions reduction are far too low. By allocating "grandfathered" emission rights to industrial countries, it fails to acknowledge the historical carbon debt owed by the wealthy who have abused the earth’s carbon absorptive capacity. Nevertheless, the Kyoto Protocol’s proposal for dealing with the carbon debt through emissions trading, despite all its problems discussed below, does recognize to a small extent the principle that those who emit excessive amounts of CO2 should pay for their overuse of the world’s carbon sinks. 

Emissions Trading Flawed 

The US government, with support from Canada, responding to powerful lobbies by its coal and petroleum industries, insisted that emissions trading be part of the Kyoto Protocol in order to give it more flexibility in meeting its CO2 reduction targets. 
    Emissions trading involves the purchase of unused greenhouse gas emission permits from countries that are below their allotments. In the negotiations for the Kyoto Protocol many environmental groups and some developing countries objected to the US proposal "on ethical grounds since the concept of Emissions Trading carries with it the notion of ‘pollution rights’". (Oberthur and Ott 1999:188-189) 
    At Kyoto the negotiation of precise language on emission rights proved difficult with the whole text left in square brackets due to developing countries objections. One objection was that tradable emission rights would be a cheap way for countries like the US, Canada, and New Zealand to buy themselves out of their obligations.  
    Of the 39 industrial nations that agreed to accept emission limitations at Kyoto, the only countries that are emitting substantially less greenhouse gas than their allowable targets are the countries of Eastern Europe and the former Soviet Union. Their emissions reductions are not, by and large, due to more efficient use of fossil fuels. Rather they are almost entirely due to the collapse of industrial production as old, inefficient factories go out of production during the transition from centrally planned economies. 
    The surplus emission rights held by these "countries in transition to a market economy" have become known as "hot air". Allowing Russia and other countries in transition to sell their rights to hot air does nothing to reduce actual CO2 emissions. But it does offer a cheap way for Western industrialized countries to meet their Kyoto commitments. 
    The whole issue of what an emissions trading regime might look like is complicated by the unresolved issue of whether developing countries that make voluntary reductions should be allowed to sell their emission reductions. These kinds of emission contractions have become known as "superheated air". In contrast to the phantom CO2 reductions from Eastern European countries, undertakings by developing countries to reduce emissions under an emissions trading regime or the Clean Development Mechanism would at least result in an actual decrease of greenhouse gas emissions. 
    So far Kyoto Protocol Article 17 limits trading rights to the industrial countries that made commitments to emissions reductions. The US bargaining position involves offering developing countries an opportunity to sell future emission reductions without any recognition of the compensation they are owed now for acting as the carbon sinks for the excessive emissions from industrial countries. 
    The reason Western industries and governments prefer emissions trading is that it would be cheaper for them to purchase "hot air" from countries with economies in transition than to reduce emissions by making their own industries more efficient. Jeffrey Rubin, the chief economist of Canadian investment firm CIBC World Markets, estimates that "the cost of importing emissions credits [will] be a third of the cost of domestic abatement policies such as carbon taxes." (GM 20/01/00:B17) 
    Emissions trading is no solution to climate change. It may only delay implementation of reductions in emissions of heat-trapping gases. The Union of Concerned Scientists (2000) affirms that significant reductions are "technically possible and can be economically feasible through energy efficiency, consumer incentives, improvements in vehicle technologies, eliminating oil and coal subsidies, and increased support of renewable energy technologies." 

Compensation for carbon creditors  

If industrial and developing countries were to agree on a new protocol involving contraction of carbon debtors’ emissions and convergence towards an equitable and sustainable per capita target for carbon emissions, the process would take several years. In the meantime the carbon creditors should be compensated as they wait for the convergence to occur. Tables 1 and 2 illustrate how that compensation might be calculated. 
   Table 1 begins with the assumption that contraction should aim to bring emissions down eventually to the level recommended by the Intergovernmental Panel on Climate Change scientists, that is 60% below actual 1990 emissions. It then uses actual 1996 emission levels to calculate by how many thousands of tonnes each G7 country exceeds the target. In the case of Germany no comparable data is available due to the fact that the unification of East and West Germany has made historical comparisons difficult. So the illustrative estimate for Germany is calculated on the basis of a 60% reduction from the 1996 level.  
   Table 2 then gives three estimates of how much compensation might be due to the ecological creditors. While the data here are for one year only, the compensatory payments would continue for as many years as it takes to achieve convergence with developing countries on common per capita emissions targets. With each passing year the carbon debtors payments would decline as the G7 countries contracted their output. Failure to curb emissions would result in higher annual carbon debt service payments. 
    As Table 2 shows, the annual carbon debt payments would depend on the price attached to each tonne of carbon emission rights. These estimates are, of course, only crude approximations of compensation due since the price assigned to carbon emission rights is a moving target and difficult to determine. 
    Nevertheless, there are some benchmarks that can be used to suggest the price of carbon emission rights. The range of estimates cited in Table 2 is derived from three possible ways of estimating the price of emission rights per tonne of carbon. Newspaper reports at the time of the Kyoto conference suggested that emission rights might trade for a price of US$10 per metric tonne of carbon. (TS 3/12/97) Another benchmark comes from a proposal by the British government to sell an 8% "overachievement" of their Kyoto reductions commitment to the US for £100 million. At 1996 UK emissions rates and at current exchange rates this trade would be the equivalent of charging about US$12.50 per tonne of emissions. Thirdly, Professor Joan Martinez Alier refers to a proposal by Costa Rica to sell CO2 absorption bonds worth US$20 per tonne of carbon absorbed by new vegetation it would cultivate for the purpose.  
    These three different prices yield the range of estimates cited in Table 2 implying initial carbon debt payments for the G7 of between US$15.5 and US$30.9 billion a year. If the results illustrated in Table 2 are expanded from just the Group of Seven to include all Northern industrial countries, then the annual carbon debt payments would be about twice as large - between US$30 billion and US$59 billion.  
    Acción Ecológica (2000:9) calls the US$20 per tonne figure "a bargain basement price". If annual payments of between US$30 and US$59 billion could have been collected over the years that Third World debt was growing out of control, they would have obviated the need for most of the loans contracted by Third World countries. Acción Ecológica (2000:9) points out that what is most important is not the exact calculation of payments due for the carbon debt, but "the relationship between these enormous figures and the external debts of the Third World [which] removes any moral justification the industrialised nations might feel they have for forcing Third World people to pay what is basically unpayable." 
 

A US$13 trillion "carbon debt in economic efficiency terms" A study sponsored by the U.K.-based agency, Christian Aid, cites "illustrative estimates [that] show the G7 running up carbon debts in economic efficiency terms of around US$13 trillion each year."  The Christian Aid study does not suggest that the US$13 trillion constitutes a liability that might one day be collected by the carbon creditors of the South.             Rather the estimate emerges from efforts by the Global Commons Institute in London to refute claims by mainstream economists who analyze climate change in "economic efficiency terms". For these mainstream economists, the destruction brought on by climate change can be treated as an affordable damage cost, especially since it occurs mostly in the South. As we saw earlier these economists tend to value the life of a human person living in the South at only one tenth of that of a person living in the North.            The authors of the Christian Aid study challenge this notion of "efficiency" with another way of calculating it based on the premise that every human has an equal right to a share of the world’s carbon absorption capacity. Their study measures how much of the G7's Gross Domestic Product is produced through the use of fossil fuels in excess of an equitable global per capita allotment of carbon emissions. The results yield a G7 deficit "in economic efficiency terms" of US$13 trillion a year.           The same team calculated the carbon credits accruing each year to the citizens of 41 Highly Indebted Poor Countries (HIPCs) who use less than 0.4 tonnes of carbon per capita. These calculations yield 2 sets of results depending on whether incomes are calculated in terms of actual exchange rates or in terms of Purchasing Power Parity (PPP) to give a truer picture of incomes in countries with weak currencies. In the former case the result is an annual credit of US$141 billion for the 41 HIPCs. When the national efficiencies were calculated in PPP terms, the 41 HIPCs have a collective annual carbon credit of US$612 billion.

Ecologically Unequal Terms of Trade 

When goods are exported at prices that do not take into account the social and environmental costs of their extraction or production, the result is ecologically unequal terms of trade. Joan Martinez Alier (1998) cites as an example Mexican oil sold to the US at a price that does not take into account the "massive environmental damages caused by oil drilling in the rainforests of Tabasco and Campeche."  
    In Ecuador it is estimated that environmental damage resulting from oil extraction by Texaco is equivalent to approximately one dollar for each barrel of oil extracted. This estimate does not include the added global damage from greenhouse gases emitted when the fuel is burned. 
    Martinez Alier (1998:13) goes on to say: "The greatest threat to the environment is overconsumption in the North. An overconsumption encouraged by an ecologically unequal trade. ... The only way to impose an ecological adjustment on the North would be by means of higher priced oil and other primary materials." Martinez Alier suggests a type of carbon tax could be collected by petroleum and minerals exporting countries to encourage conservation among importers and to compensate for the ecological costs.  
    A similar idea is found in the Oilwatch declaration released at the time of the Kyoto conference: "Oil, gas and coal prices [should] properly reflect the true costs of their extraction and consumption, including the best estimate of their role in causing climate change in order to apply the polluter pays principle to reflect the cost of carbon in the price." 
    The idea of imposing taxes to cover ecological costs is not new. Paul Hawkin (1993:82) describes this as "cost/price integration". This idea was first espoused by the Cambridge economist Pigou who argued in 1920 that "competitive marketplaces would not work if producers did not bear the full costs of production, including whatever pollution, sickness, or environmental damage they caused. Pigou’s solution was to impose a ‘tax to correct maladjustments’. ... [The] tax would be comparable to the avoided cost or the unborne expense. Pigou cited prematurely peeling paint on a house next to a coal-fired mill as an example of an external cost that should be paid by the [mill]. He theorized that when the [mill] was forced to pay the full cost, it would have incentives to reduce the negative impact." (Hawkin 1993:82) 

Conclusion 

Those who abuse the biosphere, transgress ecological limits, and enforce unsustainable patterns of resource extraction owe a huge ecological debt to the peoples of the South. One way to begin to offset this debt would be to cancel the financial debt owed by developing countries to Northern creditors. But simply writing off the financial debt is not enough. Other actions are needed, first to narrow, and then to eliminate the ecological deficit. 
    Some of the ways in which the ecological debt might be addressed include:  

• Applying taxes on petroleum and other natural resources that would be collected by exporters to cover the environmental and social costs of their extraction and production.

• A contraction, convergence and compensation agreement for discharging the carbon debt. Such a deal could become part of the international negotiations on climate change which have yet to address the need to pay compensation to Southern countries for their historic role in serving as carbon sinks for industrial nations that overuse fossil fuels.

• The Kyoto Oilwatch Declaration recommends that all public funds now spent by governments, international financial institutions, aid agencies, export credit agencies and so on in subsidizing fossil fuel extraction "should be used instead for investments in clean, renewable, and decentralized forms of energy, with a particular focus on meeting the energy needs of the poorest 2 billion people."

• The debt treaty drafted by civil society organizations at the 1992 Rio de Janeiro Earth Summit calls for pressure on international organizations to quantify the ecological debt. Similarly, the civil society organizations meeting in Bangkok in advance of the Tenth United Nations Conference on Trade And Development in February 2000 recommended that UNCTAD "conduct an audit of the origins of the financial debts of developing countries and a parallel study of the historical and contemporary social and ecological debt owed by the North to the South."

• Adequate payments must be made to Indigenous and farming communities for use of their knowledge, plant breeding and medicines by agribusiness and pharmaceutical companies.

Bibliography 

Acción Ecológica (1999) "No more plunder, they owe us the ecological debt!" Quito: Acción Ecológica 
Acción Ecológica (2000) "Trade, climate change and the ecological debt" Quito: Acción Ecológica 
Barratt Brown, Michael (1974) The Economics of Imperialism Middlesex: Penguin 
CEJI (2000) Restoring Right Relations: Educating for Jubilee Year 3 Toronto: Canadian Ecumenical Jubilee Initiative and Ten Days for Global Justice 
David Suzuki Foundation and Pembina Institute (2000) Canadian Solutions: Practical and Affordable Steps to Fight Climate Change Vancouver and Drayton Valley: David Suzuki Foundation and Pembina Institute 
Donoso, Aurora (2000) "No more looting!" Quito: Acción Ecológica 
Flavin, Christopher and Dunn, Seth (1997) Rising Sun, Gathering Winds Washington: Worldwatch 
Global Commons Institute (undated) GCI submission to the Intergovernmental Panel on Climate Change Working Group Three & the First Conference of the Parties to the United Nations Framework Convention on Climate Change London: Global Commons Institute 
Hathaway, Mark (1999) "Loosening the Cords that Bind Us: Reflections on a Theology of Debt" in Jubilee, Wealth and the Market Toronto: Canadian Ecumenical Jubilee Initiative 
Hawken, Paul (1993) The Ecology of Commerce New York: Harper Collins 
Jiménez Herrero, Luis (1989) Medio Ambiente Y Desarrollo Alternativo Madrid: Iepala 
Martinez Alier, Joan (1997) "Deuda Externa Y Deuda Ecologica" summary paper handed out at the Encuentro Continental Deuda Externa Y el Fin del Milenio, Caracas, July 
Martinez Alier, Joan (1998) "Ecological debt - external debt" Quito: Acción Ecológica 
McMurtry, John (1998) Unequal Freedoms" The Global Market as an Ethical System Toronto: Garamond 
Meyer, Aubrey and Cooper, Terry (undated report) Climate Change, Risk & Global ‘Emissions Trading  London: Global Commons Institute 
Oberthür, Sebastian and Ott, Hermann E, (1999) The Kyoto Protocol Berlin: Springer 
RAFI (1994) "Bioprospecting/Biopiracy and Indigenous Peoples" RAFI Communique Nov. 1994 Ottawa: Rural Advancement Foundation International 
RAFI (1996) "1996 Biopiracy Update" RAFI Communique Dec. 1996 Ottawa: Rural Advancement Foundation International 
RAFI (1997) "Biopiracy Update: The Inequitable Sharing of benefits" RAFI Communique Sept./Oct. 1997 Ottawa: Rural Advancement Foundation International 
RAFI (2000) Biopiracy - RAFI’s Sixth Annual Update May 2000 Winnipeg: Rural Advancement Foundation International,  found on RAFI’s web site www.rafi.org 
Schilling, Paulo (1989) "Dívida externa: quem são os devedores? in Dívida Externa E Igrejas: Uma Visão Ecumênica Rio de Janeiro: CEDI 
Shiva, Vandana (1993) Monocultures of the Mind London and Penang: Zed and Third World Network 
Shiva, Vandana (2000) "Poverty and Globalization" BBB Reith Lecture 5, found on http://news.bbc.uk/hi/english/static/events/reith_2000/lecture5 
Simms, Andrew; Robins, Nick and Meyer, Aubrey (1999) "Who Owes Who? Climate change, debt, equity and survival" London: Christian Aid 
Tavernier, Berengere (2000) "After Stiglitz" Signalling LEFT Vol. 2, No. 2 Toronto: Newsletter of the Progressive Economics Forum 
UNDP (1998) Human Development Report 1998 New York: Oxford University Press 
Union of Concerned Scientists (2000) Briefing Note on IPCC Results 1999 posted on their web page at www.ucsusa.org/warming 
Wackernagel, Mathis et al. (1997) Ecological Footprints of Nations Xalapa: Centro de Estudios para la Susentabilidad 

Newspapers cited: 
GM The Globe and Mail Toronto 
TS Toronto Star 

Recommended Web Sites: 
www.cosmovisiones.com/DeudaEcologica  - information on Ecological Debt 
www.rafi.org  - information on Biopiracy 
www.rprogress.org - information on Ecological Footprints 

Chart 2      Ecological Debtors and Creditors 
                    Per cent share of ecological footprint and of world population  

Chart 3     Per Capita Carbon Emissions of Selected Countries (1996) 
                    (metric tonnes of carbon) 

Table 1     Group of Seven CO₂ emissions relative to a 60% reduction target 
                                                (1000’s of tonnes of carbon) 
 

	Actual CO2 emissions 1996	Actual CO2 emissions 1990	Emissions Target 40% of 1990 levels;(i.e. a 60% reduction)	Carbon Debt*
USA	1,446,777	1,316,589	526,636	920,141
Japan	318,686	292,212	161,885	201,801
Germany	235,050	n.a.	n.a	141,030
UK	152,015	153,734	61,494	90,521
Canada	111,723	111,798	44,719	67,004
Italy	110,052	108,857	43,543	66,509
France	98,750	96,393	38,557	60,193
Total G7	2,472,417			1,547,199

 

Table 2     Estimates of Compensation due to Carbon Creditors 
               (1000’s of tonnes of carbon and US$ millions) 
 

	Carbon Debt*	$10 per tonne	$12.50 per tonne	$20per tonne
USA	920,141	$9,201	$11,502	$18,403
Japan	201,801	$2,018	$2,523	$4,036
Germany	141,030	$1,410	$1,763	$2,821
UK	90,521	$905	$1,132	$1,810
Canada	67,004	$670	$838	$1,340
Italy	66,509	$665	$831	$1,330
France	60,193	$602	$752	$1,204
Total G7	1,547,199	$15.5 billion	$19.3 billion	$30.9 billion

 

*Carbon debt defined as difference between 40% target and 1996 emissions

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