External Debt, Ecological Debt – Who Owes Who?

In dealing with environmental issues, the green movement in countries like Australia tend to take a local or national perspective, often forgetting that there are no real ‘borders’ when it comes to the global environment.

Co-written with Aurora Donoso.

External Debt, Ecological Debt – Who Owes Who?

There is no doubt that the condition of the planet is deteriorating rapidly. The production and consumption patterns that drive and sustain northern economies (Western Europe, North America, Japan, New Zealand and Australia) have altered the world’s natural cycles. Climate change, the product of excessive carbon dioxide emissions, has now been scientifically corroborated. Its disastrous impacts – changing weather patterns, floods, hurricanes, increasing sea levels – are felt daily, and have wiped out entire peoples and their sources of livelihood.

The list continues: deforestation, environmental pollution, loss of species and intensive extraction of natural resources. All of these result from a development model that benefits the few at the expense of the majority of human beings and the planet’s natural capacity for regeneration. According to the United Nations, the richest 20 percent of the world’s population, the vast majority of whom are to be found in northern countries, consume 80 percent of the planet’s natural wealth.

In dealing with environmental issues, the green movement in countries like Australia tend to take a local or national perspective, often forgetting that there are no real ‘borders’ when it comes to the global environment. In seeking solutions which will bring about environmental protection or sustainability, campaigns are placed firmly in the present rather than in a historical or political context. To extend our campaigning means to take a longer and broader perspective, to see that many of our current struggles are simply part of historical circumstances and patterns. One of the key factors to consider is the UN figure quoted above: that the richest communities consume around 80% of the resources. The other is to accept that as ‘first world’ people, we live on land that was taken from Indigenous people. No Nation or group ever gave up their rights to their land willingly, yet activists often forget this point. Indigenous people are often invited to become involved in specific campaigns but it is rare for green groups to acknowledge sovereignity or ownership in a real ior tangible way. We owe a debt to the First Nations on whose land we live. Until we accept and deal with this fact, any attempts as ‘sustainability’ will be be fruitless: we will need to clear our debt to the land and Indigenous people first.

Then there is another debt, one that is perhaps less obvious: that of ecological debt.

What is the Ecological Debt?

According to Accion Ecologica/ FoE Ecuador, “the cumulative responsibility of industrialized countries for the destruction caused by their production and consumption patterns is called the ‘ecological debt’. Natural wealth extracted by the North at the expense of southern people (Africa, Asia, Latin America) has contaminated their natural heritage and sources of sustenance. The ecological debt also includes the illegitimate appropriation of the atmosphere and the planet’s absorption capacity by the industrialized world. This debt is the result of a development model that is being spread throughout the world and which threatens more sustainable local economies.”

Concretely, some of the major reasons for the ecological debt are the following:

* The looting, destruction and devastation carried out by the rich countries during the colonial period.

* The extraction of natural resources (petroleum, minerals, and marine, forest and genetic resources) that continues to destroy the basis of survival for southern people.

* Ecologically inequitable terms of trade, whereby goods are exported without taking the social and environmental impacts of their extraction or production into account. Most coffee, tea, and many crops, fibre, oil, and basic food stuffs arrive in supermarkets without fair recompense to those who produced the product.

* The intellectual appropriation and use of traditional knowledge related to seeds and medicinal plants, upon which biotechnology and modern agro-industries are based, and for which Third World countries are expected to pay royalties.

* The use and degradation of the best lands, and of water, air, and human energy for the development of export crops, thus putting the food and cultural sovereignty of both local and national communities at risk.

* The contamination of the atmosphere by industrialised countries through their disproportionate emission of gases causing climate change and ozone depletion.

* The illegitimate appropriation of the atmosphere and of the carbon absorption capacity of oceans and vegetation.

* The production of chemical and nuclear weapons and substances, and the toxic wastes that are deposited in the Third World.

Indeed, the living standards enjoyed by the industrialised countries owe a great deal to the immense flows of natural and financial resources and labour (either slave or underpaid) from the Third World. These flows do not take into account the social and environmental damages caused by resource extraction. In other words, the impoverished countries of the South are subsidising the rich countries of the North!

While during the colonial period the extraction of precious metals and other resources was an openly violent affair, today’s looting uses methods that are more subtle. International organizations such as the IMF, the World Bank and the World Trade Organization seek to dictate world economic policy in order to maintain a system of dominance and control over the trade in financial and natural resources .

This is carried out through various mechanisms, including the following: the foreign debt promoted by the northern countries; the arrangement of the international market on terms favouring northern economies; foreign investment flows; the privatisation of energy, communications, water, and the earth; the ‘green’ revolution in agriculture; the practice of ‘free’ trade; the reality of technological dependence; and intellectual property laws.

Presently, under the guise of complying with obligations related to their external debts, Third World countries are being pressured to increase exports. The consequent social and environmental impacts are well documented. And the more they export, the less these countries receive. For example, between 1980 and 1995, the volume of exports from Latin America increased by 245 percent. Between 1985 and 1996, 2,706 million tons of basic resources, most of them non-renewable, were extracted and exported. The amount of resources that were transformed, destroyed or moved in order to produce these exports has not been calculated, nor has the number of people affected or displaced.

Meanwhile, between 1982 and 1996, Latin America has repaid US$740 billion in debt, more than double the $300 billion that was owed in 1982. Yet the debt has not diminished, but has rather increased to $607 billion due to an arbitrary rise in interest rates.

The external debt has already been paid a number of times over, both in financial terms and in terms of the immense flow of natural goods and cheap labour leaving the Third World. And it has been paid despite the fact that it is illegitimate, due to the

conditions under which the loans and credits were contracted, corruption in loan contracting, and speculation on financial markets. The ecological debt adds yet another vast layer of obligation from the industrialised countries to the Third World.


Aurora Donoso, FoE Ecuador & Cam Walker, FoE Australia


Accion Ecologica/ FoE Ecuador, Casilla 17-15-246-C , Alejandro de Valdez N24-33 y La Gasca, Quito – Ecuador

Tel-fax: (593 2) 547516 / 527583 / 230676 Email: red@hoy.net



At its last Annual General Meeting, FoE International launched an advocacy program for the recognition and payment of the ecological debt. This initiative has a number of objectives:

* To stop the increase of the ecological debt.

* To restore the areas in southern countries affected by the extraction of natural resources and export monocultures so that local and national communities are able to recover their capacity for self sufficiency.

* To repatriate cultural (plundered historical memory) and natural (genetic and biological material) heritage.

* To restore the areas affected by climate change, reduce CO2 emissions, and totally eliminate ozone-depleting products.

  • To eliminate all weapons, products and toxic substances that threaten the life of the planet.



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