Free The Great Disruption by Paul Gilding Page A

the earth.
    If you ran your life in 2009 the way we run the earth, you would have spent your whole year’s interest income by September 25 and the balance would then be zero. However, you’d still have expenses after that date, so you would draw cash from your capital account from September 25 until December 31. This would decrease the balance there, but your lifestyle wouldn’t be affected yet because you would have all the cash you needed. You wouldn’t yet notice any difference day-to-day.
    Then the next year, on January 1, 2010, your interest would be transferred into your income account again, but it would be less than last year because the balance in your capital account would be lower after your withdrawals over the last three months of 2009. In 2010, however, you would have greater need for cash (representing our growing economy), so you would have both less income and greater costs. As a result, in 2010 the interest income would be all gone earlier, meaning you would need to draw more cash from your capital account than you did in 2009.
    Unfortunately, you won’t be able to borrow any money to pay back in future. Why not? Because the bank would have noted that your spending was already 40 percent greater than your income and getting worse each year, so there’d be no way you could pay any loan back. Even more fundamental, if your capital account balance represents the planet, there’s nothing else to lend you.
    Nevertheless, in our comparison, this still works for you for a while. In fact, each year your lifestyle appears to get better because your expenditure is growing and you can buy more stuff, representing our growing economy. Things feel good day-to-day.
    But then one year there isn’t enough money in the capital account to top up your income account. It doesn’t happen slowly, it all happens on the day the money runs out. Then suddenly the game is up and your personal economy falls over. You can’t pay your bills and you can’t buy your food. This is system collapse.
    Every time a group of qualified scientists reviews the situation using different approaches, they reach comparable conclusions. In the absence of a monthly statement from the bank, these conclusions are the closest thing we have to a planetary income balance sheet. Their conclusion is we are trading insolvently.
    As Joe Romm of ClimateProgress.com has observed, what this means is that the global economy is basically a giant Ponzi scheme. We are using our capital to pay out income to the investors (us), and then one day the capital will run out and the scheme will suddenly fall over.
    The question in this comparison becomes, how long do we have? Is it possible to cut back our spending enough to prevent the capital from running out? Can we act to restore our capital by restoring the damage we have already done to the earth? I will answer these questions in the following chapters.
    A critical approach taken by the Stockholm Resilience Centre, and one that needs to be given much more prominence, is that there are tipping points in the system that when passed can lead to systemic breakdown that self-accelerates and is irreversible. Fisheries are a good example of this. This risk requires us to set boundaries that allow for a margin of error, something we always do when we apply risk assessments to engineering design tasks. We don’t, for example, define the stress levels when a plane will fall apart and then design it to operate at that limit; we allow for a large margin for error because failure is catastrophic.
    The crucial significance in all these studies is not the conclusions drawn in each particular report. In the context of the scientific process discussed earlier, the significance is that whenever a group of credible scientists analyzes these global issues from their particular perspective, they all draw the same basic conclusions—we are using the earth’s resources at a rate that cannot