Could Coronavirus Save The Planet By Changing Economics Forever?

The focus on economic growth has led us to the brink of ecological disaster, of which the pandemic may be a foretaste.

Activities such as large-scale commercial logging are destroying natural habitats, bringing humanity into closer contact with reservoirs of potentially lethal pathogens [File: Bruno Kelly/Reuters]

Kuala Lumpur, Malaysia - While working from my home on the outskirts of the Malaysian capital, Kuala Lumpur, a month ago, focused on the unfolding crash in world financial markets and economies due to the coronavirus pandemic, I saw one of two 50-foot palm trees in the garden also come crashing down.

The tree had been planted by the previous owners of the house, possibly around 30 years ago. On closer inspection, it became clear that its roots had simply outgrown the soil under them.

Wednesday sees the world mark the 50th annual Earth Day, a call by concerned citizens and activists for leaders to take decisive action against climate change. But this year's events will all be held online, as most of the planet struggles with the expanding coronavirus crisis and its effects on the global economy.

Much has been written about how the pandemic is crushing manufacturing supply chains and the demand for goods and services, while putting millions of people out of work.

But relatively little has been said about how economic activity may have contributed to the outbreak in the first place.

The fallen tree could be seen as something of a metaphor for a global economic system that is rapidly reaching the Earth's environmental limits.

Every economic crisis has its fair share of Cassandras predicting the imminent demise of capitalism as we know it.

But there is now a growing number of eminent scientists and economists arguing that our current methods of measuring the size and growth rate of the economy are deeply flawed, leading us to produce more goods and services than the Earth's resources can sustain.

In fact, these economists and scientists have been warning the world for years about the likely consequences of breaching those barriers.

One of those outcomes, they argue, is the possibility of frequent, and ever more ferocious, outbreaks of infectious diseases as commercial interests push humanity into closer contact with natural habitats that are reservoirs of pathogens like the SARS-CoV-2 virus that leads to COVID-19.

The current, most widely held theory of the origins of the outbreak is that it started in a seafood and wildlife market in the central Chinese city of Wuhan late last year.

The Quest For Growth

But the researchers and thinkers warning about such events are not part of mainstream economics, with its unrelenting quest for growth in gross domestic product (GDP) - the sum value of all finished goods and services generated in a country, and the most commonly used indicator of economic health.

This seafood and wildlife market in Wuhan, Hubei Province, China is suspected to be where the virus that causes COVID-19 infected the first person, setting off a global pandemic [January 10, 2020: Stringer/Reuters]

There is little doubt that the concept of economic growth has helped pull billions of people out of poverty over the last 70 years or so.

But now, its shortcomings are coming into stark relief. Researchers are questioning contemporary economics' most fundamental assumptions, including whether growth can, or indeed should, continue forever.

"More planetary crises are coming," members of The Club of Rome, a group of politicians, economists and scientists, said in a statement last month.

"If we muddle through each new crisis while maintaining the same economic model that got us here, future shocks will eventually exceed the capacity of governments, financial institutions, and corporate crisis managers to respond. Indeed, the 'coronacrisis' has already done so."

One of the problems with using GDP growth as a yardstick for our economic wellbeing is that it fails to take into account the costs to the environment of manufacturing, travelling and everything else we have taken for granted in our modern, consumerist lifestyles  until the pandemic struck, of course.

Nature's Services

Some economists have made estimates of the value of the "services" the natural environment provides us.

Trees and other plants that pull carbon dioxide out of the air, thereby helping to reduce the effects of global warming; the savings a factory enjoys by dumping its waste into an adjacent river, rather than dealing with it in ways that are less harmful to communities living downstream; the value of retaining tree roots that prevent soil erosion  these are just some examples of ecological services that standard economic measurements do not take into account.

And the value of such natural services is astounding.

Pavan Sukhdev, an economist and president of the board of conservation group World Wildlife Fund International, published a landmark paper in 2008 estimating that nature provides the global economy the equivalent of between $2 trillion and $4.5 trillion a year in such services.

Burnt land next to a palm oil plantation after fires near Banjarmasin in South Kalimantan province, Indonesia, [September 2019: Willy Kurniawan/Reuters]

That amounts to between two percent and five percent of the world's total annual GDP in 2018.

Sukhdev won the Tyler Prize for Environmental Achievement - regarded by many as the Nobel Prize for ecological conservation - earlier this year for his work on the relationship between the environment and economics.

The value of these ecological services should, some environmentalists say, be considered as costs while calculating GDP in order to give a more accurate picture of economic activity. But on the contrary, activities such as deforestation for agricultural use, or the spending necessary to recover from natural disasters, are added into national accounts, boosting GDP.

That in turn gives policymakers who want faster economic growth rates an incentive to encourage industrial activities regardless of their environmental impact.

And those policies could now be having a direct impact on our health.