What’s at Stake?

 

By MATHIS WACKERNAGEL

 

We are in a new era of resource constraints. Humanity is in global overshoot, using more renewable resources and ecological services than our biosphere can replenish. More countries are becoming increasingly dependent on resources they do not have. As a result, more countries are competing for the planet’s limited natural capital. We call this new dynamic “the global auction.”

 

In an auction, what matters most is not your absolute income, but your relative income compared to all other bidders. For example, assume your income doubles, or triples even. But still, you would be at a disadvantage when bidding at an auction – including the global resource auction – if at the same time everybody else’s income quadruples.

 

Global Footprint Network’s data, presented in AFED’s new report “Arab Atlas of Footprint & Biocapacity” highlight the fundamental conflict between the two major trends shaping the global auction: Human demand for Earth’s limited resources and services is continuously increasing, while relative income of many people is in decline.

 

Biocapacity, the productive land and sea area that produce ecological resources and services, cannot keep pace with the human demands made upon it. Today, all but two of the 22 Arab countries analyzed in the new AFED report are “biocapacity debtors,” meaning that their demand for renewable resources and carbon sinks exceeds what their own ecosystems can regenerate. In aggregate, their current demand exceeds their biocapacity nearly three-fold. In contrast in 1961, all countries covered in the AFED report combined still had 80 percent more biocapacity than those countries’ residents demanded.

 

The income trend has also seen a significant shift. For many Arab countries, their residents’ absolute income may have increased on average, but their share in global income has fallen. For instance, the residents of Jordan or Syria today earn on average 45 percent less of the total global income than they did 30 years ago (measured in GNI according to World Bank statistics). In Morocco, residents receive on average 23 percent less of the global income than they did three decades earlier. Egypt’s residents have been able to maintain their share in global income, but at an income level of only one third of world average, and with a rapidly growing biocapacity deficit (for instance in 1970, Egypt used 1.4 times what its biocapacity could provide; today, its demand is 2.6 times that of local supply).

 

This double trend of weakening bidding power with expanding biocapacity deficits is creating a new challenge for countries: Since all countries participate in increasingly interconnected economies, dropping relative incomes make it more difficult for ecological debtors to compete in the global market for the world’s limited resources.
 

Before the global auction for biocapacity (when resources were abundant), declining relative income barely affected countries’ economies. In the era of plentiful resources, supply of goods and resources was limited only by market demands. In a world where resource costs are becoming a significant factor to economic production, biocapacity and relative income trends will become key determinants of economic success or failure.

To remain economically competitive, countries with biocapacity deficits need new tools for successful policy and investment decisions. Trends are not destiny—unless they are not addressed. This emerging dynamic is the focus of AFED’s new report. The report shows that we can track those trends, that there are choices we can make, and that these choices matter. It is as simple as that.

 

Economic planners and private investors who ignore this new reality put their assets in peril. Those who track these trends, and develop policy to reverse them, have a good chance to prosper. AFED has made this topic the focus of its attention because of its commitment to the region’s prosperity. We applaud AFED for this courageous step of documenting these trends and exploring its implications for the region’s future.