From Joe Romm's blog article, "Is the Global Economy a Ponzi Scheme?"
"By enriching those who did the most plundering the most, we enabled them to fund lobbying and disinformation campaigns to convince substantial fractions of the public and media that there is no Ponzi scheme — that global warming is “too complicated for the public to understand” and nothing to worry about. In our case, investors (i.e. current generations) are paying themselves (i.e. you and me) by taking the nonrenewable resources and livable climate from future generations. To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate."
(A climate Ponzi Scheme? I chuckled when I read the headline, but after reading this carefully I have to admit that all of us have been suckered. The western world has been binging on cheap energy, we are, in a very real sense, "paying ourselves" with wealth from future generations. It's good to be a little skeptical in life, to not take anything at face value. I wish someone had taken me aside and explained about those nasty Nigerian e-mail scams before I sent along my social security number and Am Ex information. Duh! After reading this post I am more convinced than ever that there really is no free lunch. Actions have consequences. My father, who fled Communists in East Germany, who's relatives were hung for conspiring to assassinate Hitler, taught me this at a tender age. He's very conservative in his politics - always has been. On more than one occasion he reminded me to "never take my freedom for granted." But as I keep [pleading] with my father, climate change transcends day to day politics. Science and politics can be oil and water. Some day soon we're all going to wake up with a severe headache, a global fever, and wonder in an acrimonious cry how we got here? How were so many of us deceived and deluded by a handful of professional deniers, lobbyists and "flat Earthers" into not taking meaningful action sooner? Temporary insanity? Fear of the unknown? It defies common sense. Galileo was persecuted for believing the science, that the earth rotated around the sun, and not vice versa. He risked everything to make his point and elevate our understanding of how the universe really works. There are still notable gaps in that understanding. We're learning more and more about climate, and how rapid industrialization and massive spikes in carbon-based energy consumption are impacting climate today. Like the tobacco lobbyists in the 70s who kept doubt and uncertainty alive "you can't PROVE that smoking causes lung cancer, can you?" the current energy lobby and their scientifically-challenged SWAT teams of bloggers are keeping an undercurrent of doubt and uncertainty going. Yep, this cool spell PROVES that global warming is a scam! Never mind the 80s and 90s in Alaska and the Canadian Yukon and Siberia, that's just an inconvenient nugget of irrelevant information. If you're worried about climate change that makes you a flag-waving liberal, you're somehow swept up in the religion of global warming, one of those brainwashed Gore sycophants. Oh how I love labels and stereotypes. Both sides are guilty of this. It's sad that we have "sides" at all. O.K. Time to freshen up my lungs with a case of cigarettes, then head outside to watch the sun do circles around the Earth. Sounds like a good time huh?) - P.D.
Is the Global Economy a Ponzi Scheme?
Joe Romm, Physicist, Climate Expert, climateprogress.org
Yes, homo “sapiens”
sapiens have constructed the grandest of Ponzi schemes, whereby current generations have figured out how to live off the wealth of future generations. Yes, we are all in essence Madoffs (many wittingly, most not) or at least his most credulous clients. What comes next will be the subject of a multipart series.
I had been planning to write something on this for a while when NYT columnist Tom Friedman interviewed me for “The Inflection Is Near?” which appears in today’s New York Times:
“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.
“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate …’ Real wealth is something you can pass on in a way that others can enjoy.”
A few years ago I thought that aggressive action by governments around the world to push clean energy could spare the public dramatic lifestyle changes in the coming decades, but I have been convinced otherwise by
- the failure of U.S. leadership [thank you George W. Bush and the conservative
- the remarkable shift in our understanding of climate science in the past two years (here, here, and here)
- China’s decision to join the Ponzi scheme full throttle and emulate our rapaciousness (see here and here), and
- a recent, brilliant talk I heard (a teaser for a future post).
The adults, in short, are not standing up. Sadly, most haven’t even taken the time to understand that they should (see “Most opinion leaders just don’t get global warming“).
And so every generation that comes after the Baby Boomers are poised to experience the dramatic changes in lifestyle that inevitably follow the collapse of any Ponzi scheme.
This global Ponzi scheme is not just a metaphor (see “The greatest thing by far is to be a master of metaphor”), but for me a central organizing narrative of how to think about the fix we have put ourselves in (see How Lincoln framed his picture-perfect Gettysburg Address, 4: Extended metaphor).
What exactly is a Ponzi scheme? Wikipedia has a good entry:
A Ponzi scheme is a fraudulent investment operation that pays returns to investors from their own money or money paid by subsequent investors rather than from profit. The term “Ponzi scheme” is used primarily in the United States , while other English-speaking countries do not distinguish colloquially between this scheme and pyramid schemes.
The Ponzi scheme usually offers abnormally high short-term returns in order to entice new investors. The perpetuation of the high returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors in order to keep the scheme going.
In our case, investors (i.e. current generations) are paying themselves (i.e. you and me) by taking the nonrenewable resources and livable climate from future generations. To perpetuate the high returns the rich countries in particular have been achieving in recent decades, we have been taking an ever greater fraction of nonrenewable energy resources (especially hydrocarbons) and natural capital (fresh water, arable land, forests, fisheries), and, the most important nonrenewable natural capital of all — a livable climate.
The rest of Joe's thought-provoking post is here.