The Copenhagen Conference

Written by Colin Breed on Mon 7th Dec 2009

The Climate Change conference in Copenhagen has of course dominated the political agenda and the Prime Minister is attempting once again to burnish his international credentials by trying to urge greater commitments from developed countries so as to provide more realistic contributions from poorer countries. First indications look far more promising than most people had hoped but it is very early in the process and it would be wise to avoid final outcomes. It seems clear that the world has been living beyond its sustainable resources for decades and it is time to recognise that this simply cannot continue.

In some ways it is rather similar to the way the financial crisis arose with banks and other financial institutions operating beyond their sustainable resources. In a rather short period of time the banks used up their capital bases, vastly increased their levels of debt and came to an ignominious halt. Traditionally banks would use their capital to derive income or interest and use that to undertake their banking operations. However, using capital which cannot be replaced is similar to the way in which the developed world has used up the environmental capital of the world.

The land, sea and air have all been depleted. The land through excessive use of chemicals, while the destruction of rainforests and the relentless extraction of fossil fuels and minerals have contributed to the extreme growth which has polluted the atmosphere, destroyed the ozone layer and produced the greenhouse effect. The world's eco-system has been around for a long time, and has its own cycles, rhythms and rules, which mankind ignores at its peril.

The preservation of capital, or its replacement, is vital to the health of both our financial systems and our global environment. We have lived off this capital for too long and restoring it will be painful, but essential. The finances of our banking industry and the economies of our country will need unpopular and costly measures as will tackling the climate change agenda.

It is to be hoped that politicians will be courageous enough in their decisions and their citizens honest enough to accept the consequences.