Environment

World's Biggest Economies Devise Plan That Spells Doom for Planet Earth

Experts warn that the G20's massive infrastructure plan will cause "rapid ecological deterioration."

More than 80 of the world's leading scientists, environmentalists, indigenous leaders, farmers, philanthropists and authors have signed a letter to Turkish president Recep Tayyip Erdoğan, current president of the G20 group of the world's major economies, saying that they are "deeply concerned" about the G20’s focus on mobilizing as much as $60-$70 trillion of investments in large infrastructure projects over the next 15 years.

The plan to overhaul global infrastructure was devised at the last G20 meeting, held in Brisbane in November. While it may have good intentions — more roads, bridges, dams, power plants, airports, seaports, pipelines, sewers and telecommunications systems to support a rapidly growing human population — large infrastructure projects can be damaging to the environment, animal habitat and the communities they are meant to serve. From roads slicing up pristine wilderness and highways disrupting critical wildlife corridors to dams flooding rain forests, ruining freshwater biodiversity and forcing people to relocate, many mega-infrastructure projects have ultimately caused more harm than good.

"This unprecedented level of investment in a 21st-century economy must be approached with the highest sense of scrutiny and analysis," reads the letter, which was spearheaded by Foundation Earth, a Washington, D.C.-based think tank that promotes an Earth-centered economy. "Trillions of dollars spent in pursuit of typical megaprojects in the energy, transportation, agriculture and water sectors could put in place infrastructure that eliminates wildlife habitat, destroys fisheries, undermines vital ecosystems and further destabilizes the Earth’s climate," it warns. The letter's signatories include a who's who of international environmental leaders, among them Buddhist author Joanna Macy, Sea Shepherd captain Paul Watson, Wes Jackson of the Land Institute, and Indian eco-activist Vandana Shiva. 

Survival of the unfittest in the age of megaprojects

Today we are experiencing the biggest-ever infrastructure boom, with total global megaproject spending at $6-$9 trillion annually, which amounts to 8 percent of total global GDP. To be sure, a good number of these projects are worthwhile. "Sewage and water-supply systems, for example, keep diseases such as cholera at bay," write Nicklas Garemo, Stefan Matzinger and Robert Palter, directors of McKinsey & Company offices in Abu Dhabi, Hong Kong and Toronto, respectively. "Much of the Netherlands would be under water without the North Sea Protection Works, which guards that low-lying country’s landscape."

The increase in number and size of megacities like Shanghai have caused a host of environmental issues. (ArtisticPhoto/Shutterstock.com)

But the vast majority of megaprojects should not have been built at all. In a paper published in April of last year in Project Management Journal, Bent Flyvbjerg, an economic geographer at Oxford University, wrote about his research analyzing 70 years of data to conclude that there is an “iron law of megaprojects”: Not only are they are almost always “over budget, over time, over and over again,” they are also subject to the “survival of the unfittest,” with the worst projects getting built, not the best.

"The problem is not that projects worth undertaking do not exist," he writes, citing as examples of worthwhile projects the Paris-Lyon high-speed rail line, the London Docklands light railway extension and the Basque Abandoibarra urban regeneration project, which includes the Guggenheim Museum Bilbao. "The problem is that the dubious and widespread practices of underestimating costs and overestimating benefits used by many megaproject promoters, planners, and managers to promote their pet project create a distorted hall-of-mirrors in which it is extremely difficult to decide which projects deserve undertaking and which do not." Flyvbjerg adds some advice the G20 would do well to heed: "Never has it been more important to choose the most fitting projects and get their economic, social and environmental impacts right."

"We are living in the most explosive era of infrastructure expansion in human history," write William Laurance of Australia's James Cook University and his colleagues in the March 2015 issue of the journal Current Biology. They call attention to nine specific issues that must be considered in order to have any hope of limiting the environmental impacts of the G20 infrastructure plan. These include keeping wilderness areas road-free, considering projects' "secondary effects" in environmental impact assessments (EIAs) and making banks incorporate the input of environmental and social experts in their infrastructure investment decisions. "By mid-century, it is expected that there will be 25 million kilometers of new paved roads globally — enough to encircle the Earth more than 600 times," they write. "Nine-tenths of these new roads will be in developing nations, which sustain many of the planet's most biologically rich and environmentally important ecosystems."

The researchers highlight the fact that the danger to wilderness is significantly greater when one adds the numerous illegal developments taking place to the growing list of officially sanctioned projects. (The Brazilian Amazon has three times the amount of illegal roads than legal ones.) A 2013 study found that approximately 10,000 miles of roads were built every year in Brazil between 2004 and 2007. This unchecked, irresponsible development has been cited as a major contributor to deforestation and habitat loss in one of the planet's most biodiverse regions. "Knowing where the roads are and the speed at which they are built is key to predicting deforestation," said Rob Ewers, Imperial College London scientist and co-author of the study. "An understanding of road networks is the big missing gap in our ability to predict the future of this region."

A road cuts through the Amazon rainforest. Roads like this contribute to deforestation, with potential impacts for the local ecosystem, including cutting off critical wildlife corridors and destroying natural habitats that also support local economies. (image: Dr. Toby Gardner/Imperial College London)

"Roads that penetrate into wilderness areas often have particularly serious effects, often opening a Pandora's Box of environmental problems — such as promoting habitat conversion and fragmentation, poaching, illegal mining, wildfires and land speculation," the researchers said.

Laurance's paper is central to the arguments put forth in the Foundation Earth letter to the G20. Randy Hayes, the founder of Rainforest Action Network and a consultant at the World Future Council who is also the executive director of Foundation Earth, said Laurance's research is "a seminal effort, and it's going to have a huge impact in policy circles….The fight for a better world will not be easy, but this analysis gives us concrete actions and strategies for reducing the impacts of this global tsunami of new infrastructure."

Privatizing the profit while socializing the risk: Infrastructure as asset class

There is another dark side to the environmental threats inherent in the G20 infrastructure plan: The G20 leaders want to "assess the development of infrastructure as an asset class." Specifically, the infrastructure framework promotes a financing model that uses alternative investment to offset risks to partnering private firms. By creating investment vehicles around the building of roads, bridges, dams and other megaprojects, financial institutions will be able to sell financial products to investors that consist of a portfolio of public-private partnerships (PPPs).

The signatories warn that these types of financial instruments "bear a scary resemblance to financial schemes involved in the subprime mortgage bundles that causes the global economic meltdown of 2008," adding that the financialization of infrastructure will "enable risky assets to be packaged with safe ones so that investors do not know the real value of the product they are investing in."

Furthermore, they point out that "much of the corporate profit is falsely realized because they externalize the ecological and social costs onto the backs of other people and ecological systems." Citing pollution, greenhouse gas emissions and chemical runoff into waterways and oceans as examples of such unaccounted externalities, the signatories criticize the current economic model for infrastructure development as "privatiz[ing] the profit while socializing the risk."

The price of petroleum is set below its true cost to society, as it does not include the externalities of air pollution, climate change and the health and environmental problems associated with these negative effects. (image: nampix/Shutterstock.com)

"Corporate-led economic globalization hasn’t delivered nearly enough for at least two of the more than seven billion people on Earth," they assert. "It has transferred and consolidated power, effectively crippling the people’s governing rights. It has concentrated wealth within the top 1 percent and caused record-setting gaps between rich and poor. While many accomplishments have been made in raising living standards and advancing technologies, they have also come at a great price to the health of the planet."

They urge the G20 to "seek top advisors with commensurate political power who understand earth systems," warning that "if corporate executives and finance ministers drive this agenda with a flawed ideology, our future may be doomed to rapid ecological deterioration with limited chance for recovery."

Nancy Alexander, director of economic governance at the Heinrich Boell Foundation, an independent political foundation affiliated with the German Green Party and headquartered in Berlin, writes, "Without democratic controls, investors may privatize gains and socialize losses, while locking in carbon-intensive and other environmentally and socially damaging approaches."

A tired, old saw: economy vs. environment

Although ostensibly an economic cooperation group, the G20 isn't always so blatantly ignorant about the environment. In November, G20 leaders, including President Obama, forced Australia to include stronger climate change language in the Brisbane Summit Communiqué, after Australian PM Tony Abbott told the summit that as the leader of one of the world's biggest coal producers, he would be "standing up for coal."

In a remarkable statement made before the Brisbane meeting, Abbott insisted that economic growth must take precedence over environmental concerns at the summit, conflicting with the U.S. position that climate change is a central issue for the global economy.

Australian Prime Minister Tony Abbott meets with President Obama at the White House in June 2014. Abbott has been criticized by environmentalists for his defense of the coal industry. (image: White House)

Among the major western nations, Australia is the worst carbon emitter per capita — a worrisome statistic that may not change any time soon, considering Abbott's head-scratching statement in October 2014 that "coal is good for humanity." Only two nations, coal-loving Australia and Saudi Arabia — the world's top petroleum exporter — opposed the inclusion of climate in the summit agenda.

Notwithstanding those two outliers, the G20 affirmed its commitment to acting on climate change in the communiqué:

We support strong and effective action to address climate change. Consistent with the United Nations Framework Convention on Climate Change (UNFCCC) and its agreed outcomes, our actions will support sustainable development, economic growth, and certainty for business and investment. We will work together to adopt successfully a protocol, another legal instrument or an agreed outcome with legal force under the UNFCCC that is applicable to all parties at the 21st Conference of the Parties (COP21) in Paris in 2015. We encourage parties that are ready to communicate their intended nationally determined contributions well in advance of COP21 (by the first quarter of 2015 for those parties ready to do so).

But its infrastructure plan, many experts argue, is short-sighted, unscientific and goes against sustainable development, failing to recognize exactly how megaprojects impact ecosystems. "Unless managed with extreme care, it would be an environmental disaster wrapped in a catastrophe," William Laurance says of the proposal.

To help further their cause and devise a strategy to influence the G20 investment plan, Foundation Earth has hosted two roundtable discussions that included universities, NGOs and environmental organizations.

"Our survival, or our quality of life, may directly depend on the decisions these investments will set in motion," the signatories warn.

The Brisbane communiqué opens with a noble goal: "Raising global growth to deliver better living standards and quality jobs for people across the world." Unfortunately, the G20 leaders have missed an important point: Without a healthy, functional and stable planetary environment, that goal is meaningless.

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Reynard Loki is AlterNet's environment, food and animal rights editor. Follow him on Twitter @reynardloki. Email him at [email protected].

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