It's not the 'what', but the 'how':Exploring the role of debt in natural resource (un)sustainability

<div><p>A debt-based economy cannot survive without economic growth. However, if private debt consistently grows faster than GDP, the consequences are financial crises and the current unprecedented level of global debt. This policy dilemma is aggravated by the lack of analyses factoring the impact of debt-growth cycles on the environment. What is really the relationship between debt and natural resource sustainability, and what is the role of debt in decoupling economic growth from natural resource availability? Here we present a conceptual Agent-Based Model (ABM) that integrates an environmental system into an ABM representation of Steve Keen’s debt-based economic models. Our model explores the extent to which debt-driven processes, within debt-based economies, enhance the decoupling between economic growth and the availability of natural resources. Interestingly, environmental and economic collapse in our model are not caused by debt growth, or the debt-based nature of the economic system itself (i.e. the ‘<i>what</i>’), but rather, these are due to the inappropriate use of debt by private actors (i.e. the ‘<i>how</i>’). Firms inappropriately use bank credits for speculative goals–rather than production-oriented ones–and for exponentially increasing rates of technological development. This context creates temporal mismatches between natural resource growth and firms’ resource extraction rates, as well as between economic growth and the capacity of the government to effectively implement natural resource conservation policies. This paper discusses the extent to which economic growth and the availability of natural resources can be re-coupled through a more sustainable use of debt, for instance by shifting mainstream banking forces to partially support environmental conservation as well as economic growth.</p></div

Exploring sustainable scenarios in debt-based social-ecological systems: The case for palm oil production in Indonesia

A debt-based economy requires the accumulation of more and more debt to finance economic growth, while future economic growth is needed to repay the debt, and so the cycle continues. Despite global debt reaching unprecedented levels, little research has been done to understand the impacts of debt dynamics on environmental sustainability. Here, we explore the environmental impacts of the debt-growth cycle in Indonesia, the world's largest debt-based producer of palm oil. Our empirical Agent-Based Model analyses the future effects (2018-2050) of power (im)balance scenarios between debt-driven economic forces (i.e. banks, firms), and conservation forces, on two ecosystem services (food production, climate regulation) and biodiversity. The model shows the trade-offs and synergies among these indicators for Business As Usual as compared to alternative scenarios. Results show that debt-driven economic forces can partially support environmental conservation, provided the state's role in protecting the environment is reinforced. Our analysis provides a lesson for developing countries that are highly dependent on debt-based production systems: sustainable development pathways can be achievable in the short and medium terms; however, reaching long-term sustainability requires reduced dependency on external financial powers, as well as further government intervention to protect the environment from the rough edges of the market economy

Exploring sustainable land use in forested tropical social-ecological systems: a case-study in the Wet Tropics

Tropical countries lie at the nexus of three pressing issues for global sustainability: agricultural production, climate change mitigation and biodiversity conservation. The forces that drive forest protection do not necessarily oppose those that drive forest clearance for development. This decoupling, enhanced by the stronger economic forces compared to conservation, is detrimental for the social-ecological sustainability of forested tropical landscapes. This paper presents an integrated, and spatially-explicit, Agent-Based Model that examines the future impacts of land-use change scenarios on the sustainability of the Wet Tropics region of tropical Queensland, Australia. In particular, the model integrates Bayesian Belief Networks, Geographical Information Systems, empirical data and expert knowledge, under a land-sharing/land-sparing analysis, to study the impact of different landscape configurations on trade-offs and synergies among biodiversity and two ecosystem services (sugarcane production and carbon sequestration). Contrary to most tropical regions, model simulations show that Business As Usual is helping to reconcile these contrasting goals in the forested landscape of the Wet Tropics. The paper analyses which combination of governance and socio-economic factors is causing these positive results. This is an outstanding achievement for a tropical region, considering that most tropical areas are characterized for having stronger economic-land clearing forces compared to conservation forces, which reduce important ecosystem services for human wellbeing and the health of ecosystems

Correction: It's not the 'what', but the 'how': Exploring the role of debt in natural resource (un)sustainability.

[This corrects the article DOI: 10.1371/journal.pone.0201141.]

It’s not the ’what’, but the ’how’: Exploring the role of debt in natural resource (un) sustainability

A debt-based economy cannot survive without economic growth. However, if private debt consistently grows faster than GDP, the consequences are financial crises and the current unprecedented level of global debt. This policy dilemma is aggravated by the lack of analy-ses factoring the impact of debt-growth cycles on the environment. What is really the relationship between debt and natural resource sustainability, and what is the role of debt in decoupling economic growth from natural resource availability? Here we present a conceptual Agent-Based Model (ABM) that integrates an environmental system into an ABM representation of Steve Keen’s debt-based economic models. Our model explores the extent to which debt-driven processes, within debt-based economies, enhance the decoupling between economic growth and the availability of natural resources. Interestingly, environmental and economic collapse in our model are not caused by debt growth, or the debt-based nature of the economic system itself (i.e. the ‘what’), but rather, these are due to the inappropriate use of debt by private actors (i.e. the ‘how’). Firms inappropriately use bank credits for speculative goals–rather than production-oriented ones–and for exponentially increasing rates of technological development. This context creates temporal mismatches between natural resource growth and firms’ resource extraction rates, as well as between economic growth and the capacity of the government to effectively implement natural resource conservation policies. This paper discusses the extent to which economic growth and the availability of natural resources can be re-coupled through a more sustainable use of debt, for instance by shifting mainstream banking forces to partially support environmental conservation as well as economic growth

Exploring sustainable land use in forested tropical social-ecological systems: A case-study in the Wet Tropics

Tropical countries lie at the nexus of three pressing issues for global sustainability: agricultural production, climate change mitigation and biodiversity conservation. The forces that drive forest protection do not necessarily oppose those that drive forest clearance for development. This decoupling, enhanced by the stronger economic forces compared to conservation, is detrimental for the social-ecological sustainability of forested tropical landscapes. This paper presents an integrated, and spatially-explicit, Agent-Based Model that examines the future impacts of land-use change scenarios on the sustainability of the Wet Tropics region of tropical Queensland, Australia. In particular, the model integrates Bayesian Belief Networks, Geographical Information Systems, empirical data and expert knowledge, under a land-sharing/land-sparing analysis, to study the impact of different landscape configurations on trade-offs and synergies among biodiversity and two ecosystem services (sugarcane production and carbon sequestration). Contrary to most tropical regions, model simulations show that Business As Usual is helping to reconcile these contrasting goals in the forested landscape of the Wet Tropics. The paper analyses which combination of governance and socio-economic factors is causing these positive results. This is an outstanding achievement for a tropical region, considering that most tropical areas are characterized for having stronger economic-land clearing forces compared to conservation forces, which reduce important ecosystem services for human wellbeing and the health of ecosystems

Exploring sustainable scenarios in debt-based social–ecological systems: The case for palm oil production in Indonesia

A debt-based economy requires the accumulation of more and more debt to finance economic growth, while future economic growth is needed to repay the debt, and so the cycle continues. Despite global debt reaching unprecedented levels, little research has been done to understand the impacts of debt dynamics on environmental sustainability. Here, we explore the environmental impacts of the debt-growth cycle in Indonesia, the world’s largest debt-based producer of palm oil. Our empirical Agent-Based Model analyses the future effects (2018–2050) of power (im)balance scenarios between debt-driven economic forces (i.e. banks, firms), and conservation forces, on two ecosystem services (food production, climate regulation) and biodiversity. The model shows the trade-offs and synergies among these indicators for Business As Usual as compared to alternative scenarios. Results show that debt-driven economic forces can partially support environmental conservation, provided the state’s role in protecting the environment is reinforced. Our analysis provides a lesson for developing countries that are highly dependent on debt-based production systems: sustainable development pathways can be achievable in the short and medium terms; however, reaching long-term sustainability requires reduced dependency on external financial powers, as well as further government intervention to protect the environment from the rough edges of the market economy

UML activity diagram.

<p>Structure diagram for each time-step in the model, showing the step by step processes computed by agents and patches.</p

Simulation results.

<p>Results obtained for the indicators selected under a fractional-reserve system–without government intervention (red dotted line) and with government intervention when the total natural resource stock is at 25% (yellow short-dash) and 50% (green solid line)–and under a full-reserve system (purple long-dash line). Black coloured curves (i.e. dotted, solid, short and long-dashed) show the mean values, whereas coloured bands represent the standard error bars including all the runs computed for each indicator under every scenario.</p

Main model functions and the corresponding algorithms.

<p>Main model functions and the corresponding algorithms.</p