‘Unequal ecological exchange’ worsens across time and space, creating growing Northern environmental liabilities

19 May 2021 by Patrick Bond , Rahul Basu

What is “unequal ecological exchange,” especially when applied to resource flows affecting the Global South and its future generations? How does the North’s ecological debt – also termed environmental liabilities – to the South grow, as a result?


These are vital but underemphasized questions of resource economics, and they have implications for both temporal and spatial justice. Due to unequal ecological exchange, future generations lose natural wealth to present generations, and Global South locations from which resources are drawn but not properly compensated are owed an ecological debt.

But counting this debt presents its own problems, as we explore below. Under conditions where corporations have adopted the ideology of “natural capital accounting” for their own ends, there are profound dangers associated with monetizing nature. Yet if carefully handled, these are outweighed by the conceptual and practical merits of illustrating the underlying costs of extracting nonrenewable resources, for the purpose of calculating the rich world’s debt to the majority, and also for cases where Global South activists demand that the resources be left underground.

Such arguments are becoming more common in anti-extractivist activist circuits. They require more active support from those researchers, journalists and policy makers concerned about justice, solidarity and sustainability across space and time.

The point, explained below, is to halt the uncompensated extraction of nonrenewable minerals, oil, and gas. We oppose the siphoning of wealth from future generations to the current as well as from poorer, resource-dependent regions to the core of world capitalism.

As Andreas Mayer and Willi Haas (2016, 351) put it: “The disproportionately high levels of resource consumption in some parts of the world have created a debt towards the environment, towards other parts of the world, and also towards future generations through the excessive consumption of non-renewable resources.” This article reveals ways of conceptualizing resource injustices following from this form of unequal ecological exchange.

 Counting nature’s value?

Across both time and space, measurement of unequal exchange immediately raises controversies, such as those associated with natural capital accounting methodologies and, specifically, their utilization by major corporations and allied multilateral institutions to “neoliberalize nature.” Hence, we take very seriously the importance of a dialectical application of these ideas.

In our applied work with organizations committed to eliminating or minimizing damage associated with the resource-extractive industries, we learn from both empirical and theoretical critique of the status quo and its ideology. But as discussed in the conclusion, the merits of a radical reappropriation of resource accounting for intergenerational and spatial justice are enormous.

To begin, the most unjust abuse of resources is obvious: fossil fuels. Oil and gas are already responsible for catastrophic greenhouse gas emissions and what is termed “loss and damage” caused by climate change. The benefits of fossil fuel consumption accrue to those alive today versus costs paid by those who do – and who will – suffer droughts and drying soils, forest fires, floods, sea-level increases, and ocean acidification amidst fast-rising temperatures tomorrow.

Not only temporal but also geographical implications are obvious too: those who benefit most have a higher carbon footprint and come from the Global North. The losers of the Global South not only did not cause the crisis, but are least able to finance adaptation and resilience as well as cover loss and damage (Bond Bond A bond is a stake in a debt issued by a company or governmental body. The holder of the bond, the creditor, is entitled to interest and reimbursement of the principal. If the company is listed, the holder can also sell the bond on a stock-exchange. 2012). This “climate debt” occurs across time and space in obvious ways.

In this article, we will focus on not only such obvious climate injustices but also two other features associated with resource dependencies: the intergenerational (temporal) and geographical (spatial) transfers of nonrenewable resource wealth. These transfers are extremely important.

To illustrate, the Pacific island nation of Nauru, where a century of phosphate mining left a legacy of barren land and environmental catastrophe along with near bankruptcy, is a classic example of consuming intergenerational wealth (Gowdy and McDaniel 1999).

As for Sub-Saharan Africa, the World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

estimates that resource depletion collectively costs countries more than 3 percent of their collective gross income annually due to inadequately uncompensated minerals and oil extraction (Bond 2018; Lange, Wodon, and Carey 2018, 62).

There are, in short, massive environmental liabilities Liabilities The part of the balance-sheet that comprises the resources available to a company (equity provided by the partners, provisions for risks and charges, debts). – ecological debts – owed by current generations and by the Global North. These include debts owed by elites within the South – e.g., what might be considered “sub-imperial” Brazilian, Russian, Indian, Chinese, and South African companies operating within Africa to future generations and the poorest peoples. These are not currently on the agenda to be repaid, even if resistance to firms from such countries is rising (Bond and Garcia 2015; van der Merwe, Bond, and Dodd 2019).

A just society’s version of a natural resource legacy should, in contrast, be provided to future generations and to the poorest regions from which the resources are extracted. One example of ecological debt paid to compensate pollution-related damage to natural resources is the US Superfund program, but it is limited to local processes.

Globally, one unsatisfactory example is the Green Climate Fund, which supports projects in poor countries but with no recognition of the funders’ liability in the event they are major greenhouse gas emitters. Ignoring such “climate debt” was a condition of signing the 2015 Paris Climate Agreement (Bond 2016).

When dug up by multinational or local corporations, natural resources are typically depleted without appropriate compensation mainly because of adverse power relations. The depletion of wealth is most extreme in the Global South and especially in cases in which dictatorships or authoritarian regimes are in league with global and local capital.

Such sites’ reinvestments of resource rents compare unfavorably to democratic countries, some of which (e.g., Norway) plough back proceeds of resource extraction into sovereign wealth funds. That process occurs because of the state-owned and managed character of resource ownership and use.

For example, Equinor, Norway’s state-owned oil company, finances a sovereign wealth fund Sovereign Wealth Fund A sovereign wealth fund or SWF is an investment fund owned by a State. It is funded by exports of high-value raw materials or by large trade-balance surpluses. In 2013, such funds managed approximately $5.2 trillion in assets. that invests the proceeds and distributes its income. In turn, this makes it possible to engage in more rational use of such income for future generations via educational and social-infrastructural investments and to curb uneven geographical development with compensatory payments.

What is the appropriate way to draw down this wealth? A long-standing difference exists between a “weak-sustainability” conception of resource depletion and “strong sustainability.” In the weak version, the substitutability of capital means a reduction in natural capital is compensated for by investment in productive or human capital (Hartwick 1977; Solow 1974). The strong-sustainability position aims to protect the overall stock of natural resources, as argued by Herman Daly (1996).

Regardless of this debate, the recirculation of resource-sourced wealth is extremely unusual and is feasible in a few sites, like Norway, because of a long tradition of social democracy based on the society’s commitment to fairness. That commitment followed the struggles of trade unions and rural people’s organizations to unite in red-green coalitions that won power during the twentieth century, eventually constructing a welfare state (Esping-Andersen 1990).

In contrast, resource-endowed areas – especially in the Global South – that suffer repressive, super-exploitative conditions of accumulation offer examples of how not to appropriate common natural wealth. In these sites, current wealthy owners of the extractive industries facilitate both temporal and spatial shifts of value in ways that impoverish descendants and the “resource-cursed” regions.

To be sure, the resource curse meme has been abused, particularly because it blames the minerals, oil, and gas – when it is in reality powerful extractive and rentier forces that require attention. The “ecological determinism” associated with resource curse analysis also undermines relational ways of understanding nonrenewable resources within changing historical and sociocultural contexts.

As a result, we agree with Nigerian oil critic Cyril Obi (2010, 483), who suggests we replace the resource curse premise with a “radical political economy which lays bare the class relations, contradictions, and conflicts rooted in the subordination of the continent and its resources to transnational processes and elites embedded in globalized capitalist relations.”

Again though, just as in the weak-versus-strong sustainability debate, for our purposes below we set aside semantic disputes over the two words “resource curse” – but retain our critique of helter-skelter extraction. This critique combines concerns about unequal ecological exchange ranging over both the temporal and spatial ebbs and flows of non-renewable natural wealth.

These two levels of analysis – temporal and spatial – have as their core political strategy the “valuation” of natural wealth, so as to empower both younger generations and current inhabitants. By valuing such wealth in quantitative and even monetary terms, we do not mean to endorse further capitalist environmental appropriation of what Marx termed the “free gift of nature.”

Instead, the point we want to establish, is that a radical reappropriation of these concepts is feasible so as to develop new tools to better resist exploitative resource extraction. Thus the critique of unequal ecological exchange below does rely upon natural capital accounting as a core conceptual tool, but it is one which we believe adds to anti-extractivists’ traditional concerns about the excessive political-socio-economic-environmental costs of nonrenewable resource depletion.

There is at least partial support for such accounting in some official quarters – for example, the Indian judiciary (Supreme Court of India 2014) and Africa’s 2012 Gaborone Declaration (Bond 2018). And there are also activist initiatives that use ecological economics as a basis to account for nature in the struggle against extractivism (including in Environmental Impact Assessments), even if it does not yet influence policy decision-making.

In all these settings, the imperatives of capital accumulation and class formation have together, thus far, overwhelmed both grassroots activists who resist extraction, and those technocrats from the state and civil society who are engaged in policy critique using natural capital accounting.

Nevertheless, an opportunity rises to raise awareness and address extraction by engaging with both resource curse analysis and NGO “transparency” advocacy. Both could improve dramatically if the temporal and spatial concepts of “Intergenerational Equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. ” and geographical justice were applied.

At the same time, it is vital not to promote “neoliberal nature,” in which not just a valuation is made, but a price system agreed upon in markets for the purposes of commodification and trading Market activities
Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit.
. So we agree with critics of natural capital accounting – e.g., Sian Sullivan (2014) – that there is a danger when green capitalists (known as “ecological modernizationists”) attempt to “internalize the externalities” of extractive industries using market mechanisms, such as offsets or emissions trading in carbon markets. (HIS Markit measures such prices using a Global Carbon Index.)

That battle must also be joined, for the revitalization of global climate policy thanks to Joe Biden and John Kerry will re-empower neoliberal strategists and financiers, especially those who believe that having 22 percent of current world emissions under some form of carbon pricing is a positive sign – no matter that the 2021 market price for emitting a ton of carbon is nearly universally under $50, when the $80-100 range is vital to incentivize a switch to low-carbon systems. Moreover, there is huge variance (e.g., South Africa’s at just $0.43 per ton compared to Sweden’s at $132 per ton).

Most ominously, the CO2 emissions market still swings wildly, following closely the irrational fluctuations of stock markets, including during the 2020 Covid-19 roller-coaster.

Mainstream discourses on resource justice need revitalization

From where did natural capital accounting emerge? Marxist political ecologist Paul Burkett (2006) confirms that one of the early-1970s challenges to mainstream (neoclassical) economics was the notion of “limits to growth”: scarcity associated with excessively rapid depletion of nonrenewable resources. A new discipline arose, based on reconceptualizing the environment as natural capital.

According to Burkett (2006, 94), “although the origins of natural capital are unambiguously neoclassical, ecological economists have been at the forefront in developing and popularizing its usage… as a core paradigmatic concept.” In short, argued neoclassical economists, “an economy can indefinitely maintain a positive level of consumption by investing its savings in capital, so long as capital can be substituted for the natural resource,” as Burkett explains.

Within this logic, the concept of Intergenerational Equity – so as to not draw down natural wealth too rapidly – gradually dawned. The next step, following leading mainstream economist Robert Solow’s (1974) suggestion that various forms of capital are substitutable, was his student John Hartwick’s (1977, 972) call to:

“Invest all profits or rents from exhaustible resources in reproducible capital such as machines. This injunction seems to solve the ethical problems of the current generation short-changing future generations by ‘overconsuming’ the current product, partly ascribable to current use of exhaustible resources. Under such a program, the current generation converts exhaustible resources into machines and ‘lives off’ current flows from machines and labor.”

Taking the “Hartwick Rule” argument from natural to productive capital and then to “human capital” investment (the “knowledge stock”) was not a major leap. Even aside from how objectional it is to reduce all life to a capitalist calculation, one ready objection is that the substitutability of these different kinds of capital is not at all straightforward (Berkes and Folke 1992; Burkett 2006).

Also important, conceptually, is dividing natural resources into two types: renewable and nonrenewable (exhaustible). For accounting purposes, ecological economists Robert Costanza and Daly (1992, 38) argued, “Renewable natural capital is analogous to machines and is subject to … depreciation; nonrenewable natural capital is analogous to inventories and is subject to liquidation.”

Notwithstanding these complications, as well as the ethical problem of monetizing life forms, the framing of natural resources as capital has taken hold. With this in mind, Gro Harlem Brundtland’s World Commission on Environment and Development (1987) stressed intertemporal justice, by defining “sustainable development” as meeting “the needs of the present without compromising the ability of future generations to meet their own needs.”

Likewise in 1993, summing up two decades of mainstream environmental-economics thinking, Solow (1993, 170) asked, “What should each generation give back in exchange for depleted resources if it wishes to abide by the ethic of sustainability? … [W]e owe to the future a volume of investment that will compensate for this year’s withdrawal from the inherited stock.”

The calculation of nonrenewable natural capital as a negative “withdrawal” became one of Daly’s (1996) objectives when he briefly worked inside the World Bank, even though his agenda was much more radical: reversing the neoliberal policy agenda using natural capital accounting as a lever.

Daly’s 1996 farewell speech beseeched Bank colleagues to “stop counting natural capital as income” without a corresponding debit to account for depletion, and to instead, “maximize the productivity of natural capital in the short run, and invest in increasing its supply in the long run.” That would also necessarily entail a “move away from the ideology of global economic integration by free trade, free capital mobility, and export-led growth.”

As might be expected at an institution like the World Bank, Daly’s natural capital accounting hit a brick wall, he admitted, because it “just confirmed the orthodox economists’ worst fears about the subversive nature of the idea and reinforced their resolve to keep it vague” (Daly 1996, 88–93). It took more than a decade for Daly’s words to resonate sufficiently that the counting of natural capital began in earnest. Impressive organizing efforts by the Bank and Conservation International led to a Wealth Accounting and the Valuation of Ecosystem Services (WAVES) project.

A parallel pro-extractive interstate institution is the Committee for Mineral Reserves International Reporting Standards (2020), self-described as an “international initiative to standardize market-related reporting definitions for mineral resources and mineral reserves.”

As one example of WAVES’ work, the 2012 Gaborone Declaration for Sustainability in Africa was signed a month before the Rio+20 Earth Summit, at a time when world environmental policy leaders anticipated a major shift toward the “green economy” and associated techniques of ecological modernization. According to that declaration, “limitations that GDP GDP
Gross Domestic Product
Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another.
has as a measure of well-being and sustainable growth” left ten African signatory countries to begin “integrating the value of natural capital into national accounting and corporate planning.”

Although supposedly an “African-led initiative for sustainable development,” the Bank and Conservation International took up the primary duties of implementation. Because of the often-corrupting ties between multinational mining corporations and states, few African elites exhibited interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. in WAVES, quite logically, for this sort of information certainly doesn’t serve their interests.

African statistical agencies work within WAVES to gather data but so far avoid core contradictions of extractive industries; for example, Zambian researchers neglect to measure copper depletion.

At this point, in contrast to World Bank approach, it is again important to distinguish between two divergent conceptions of sustainability – strong and weak. Strong sustainability considers as especially critical those types of capital that cannot be substituted by other forms of capital, such as the wealth of Earth’s biodiversity and species diversity.

Strong sustainability requires that the stock of natural capital does not decrease and thus motivates the precautionary principle – do not risk a catastrophe – that environmentalists apply to climate change, nuclear power, and the like. Sociocultural artifacts, burial sites, spiritually important places, and sacred mountains would also fall in this category. In the context of Goa, India, the Western Ghats are both a biodiversity hotspot as well as the water tower of peninsular India.

Although, following Hartwick (1977), weak sustainability advocates do acknowledge that natural capital is depleting, typically without adequate compensation to those losing wealth, this perspective assumes that different types of capital (natural, produced, cultural, and so on) can replace each other. Their standpoint is merely that the total stock of capital should not decline.

Therefore, while extracting minerals reduces or depletes the available quantity of mineral resources for use by future generations, the Hartwick Rule holds that consumption can be maintained “sustainably” if the values of nonrenewable resources are continuously invested – e.g., in human capital through higher education subsidies – rather than used for consumption.

The Hartwick Rule is intuitive: so as to keep inherited capital at least constant when a mineral (a nonrenewable resource) is extracted – thereby reducing a country’s mineral wealth – that country should create or invest in another asset Asset Something belonging to an individual or a business that has value or the power to earn money (FT). The opposite of assets are liabilities, that is the part of the balance sheet reflecting a company’s resources (the capital contributed by the partners, provisions for contingencies and charges, as well as the outstanding debts). of at least the same value as the mineral that is depleted.

Taking the economic value of mineral resources to be the difference between the price paid in the market versus the total cost of producing it, including a return on capital (“resource rent” or “economic rent”), the Hartwick Rule thus requires that this value of extracted mineral resources be captured and continually reinvested.

The Hartwick Rule is one way to implement the Intergenerational Equity principle. After Hartwick, many others expressed concerns with depletion, including Christian Azur and John Holmberg (1995, 11) who grappled with appropriate costings over time, estimating Generational Environmental Debt as “a measure of the total amount of environmental damage that past and present generations have caused, but that will affect future generations” from accumulated CO2 emissions.

This value-laden choice continues to aggravate environmental economics, such as when the Nobel economics prize was given to William Nordhaus in 2018 in spite of his controversial discounting of future life (Hickel 2018).

But the concept has deep roots in human civilization, which unfortunately have been obscured over time. Consider inheritance law: inheritors of property are simply custodians for future generations, especially if the inheritance involves “entailment,” which constrains a present heir from consuming the inheritance, because it recognizes the rights of subsequent heirs.

To illustrate, in most cultures, there is the rich good-for-nothing heir who lives high on the hog, by selling off the family silver, unfairly impoverishing their future generations.

Or, consider endowment funds, where the capital is conserved and only the income used. The deepest rationale in this case is the idea of stewardship, the idea that capital must first be conserved. Indeed, the accounting and economics professions generally define income not as revenue but as the residual after we ensure that the capital is held constant.

Further, environmental economics provides us with the “sustainable yield Yield The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value. ” principle: we can only consume that amount that does not endanger the capital. And, in most countries, natural resources – including forests, streams, beaches, oceans, atmosphere, and minerals – are owned by the state as a trustee on behalf of the people and especially future generations.

This public trust doctrine represents one form of implementing the Intergenerational Equity principle, in the public domain. It is often derived from natural law and considered more fundamental than the Constitution. For the trustees, the foremost obligation is to ensure the corpus of the trust is kept whole. Moreover, there is a duty to treat all the beneficiaries equally.

In 2017, the Pennsylvania Environmental Defense Foundation won a judgment in the Supreme Court of Pennsylvania (2017) that the state must consider natural resources in the role as trustee, not proprietor, and therefore must use the proceeds from extracting oil and gas for restoring the environment, not general government expenditure.

Given the powerful demands by youth activists that Intergenerational Equity be central to future climate politics, this is a vital time to revisit the idea, and to apply it to all society-nature relations.

 Evidence from natural capital accounts

How do these ideas of environmental stewardship relate to natural capital, valuation of nature and ecological debt? There are increasing studies of both spatial and temporal inequity associated with extractivism, especially efforts to limit its damage or to demand reparations from polluters.

In Goa, India, for example, Intergenerational Equity was identified based upon audited financial accounts of the largest mining company, which revealed a system of leases that resulted in the loss of over 95 percent of the value of local minerals (after deducting extraction expenses and a reasonable profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. for the extractor). Over eight years, the state Government of Goa received less than 5 percent of the mineral value as royalty, a pittance in comparison to the windfall profits raked in by the corporations.

The amount lost is a redistributive per-head tax, contributing to spatial inequity. Worse still, even the royalty was treated as windfall revenue and frittered away, cheating future generations of their entire inheritance (Basu 2015, 44–48).

In such contexts of extreme resource depletion, there are at least two steps in achieving, at minimum, weak sustainability of mineral resources: ensuring no loss in the value of the natural resources and investing those amounts received, in exchange for selling the mineral wealth in productive assets so that overall wealth does not decline (Basu and Pegg 2020, 1).

To measure whether these two steps have been taken, an “adjusted net saving” variable was adopted by the World Bank. Its The Changing Wealth of Nations series reports on how “increasing standards of living lies in building national wealth, which requires investment and national savings to finance this investment” (World Bank 2011, 37). The level of national savings reflects whether there has been an increase in wealth, net of natural capital extraction.

By definition, income minus consumption = savings = increased wealth. Increases in national wealth usually enable higher levels of subsequent income; rising wealth is a stronger requirement than Hartwick’s Rule, which simply requires the maintenance of wealth.

The Bank modified the orthodox measure of savings to account for nature and education, terming this adjusted net saving (or “genuine saving”). In short, gross national saving is adjusted for annual changes in volumes of all forms of capital, including natural capital and human capital.

More specifically, a country’s adjusted net saving is measured as the economy’s net national savings minus the value of physical capital’s depreciation (“fixed capital consumption” due to wear and tear), environmental degradation (e.g., pollution), and depletion of subsoil assets and deforestation, but then with the addition of education expenditures (World Bank 2011, 37).

If adjusted net saving is negative, according to this logic, then the country is running down its capital stocks and reducing future well-being, social welfare, and future capacity to maintain extant standards of living. And if adjusted net saving is positive, then the country is adding to wealth and future well-being (World Bank 2011, 37).

Evidence indicates that countries that are more dependent on mineral extraction have underinvested – their adjusted net saving tends to be lower. In the Bank’s calculations, all countries where mineral rents account for 15 percent or more of their gross domestic product (GDP) have underinvested in other forms of capital.

In other words, these countries are simply using up their natural resources to finance consumption rather than investing in productive assets, thereby both making themselves poorer in aggregate (World Bank 2011, 11) and cheating future generations of their inheritance.

Sub-Saharan Africa’s Gross National Income, $, 1960-2018

Source: World Bank

Regional Composition of Wealth by Types of Capital, 1994 and 2014 (percent)

Adjusted Net Saving (as share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of Gross National Income) by Region, 1995-2015

Source: Lange et al, 2018, 63. (Middle East/North Africa have data gaps, thus broken lines)

Source: Lange et al, 2018, 51.

Adjusted Net Saving for Sub-Saharan Africa, 1995-2015 (percent of GNI)

Source: Lange et al, 2018, 66.

Though not typically conceded by the Bank, it is vital to define this resource “consumption” as including profit expatriation plus Illicit Financial Flows associated with multinational corporates’ extraction in poor countries. This spatial injustice allows for inordinately high consumption by the firms’ overseas executives and shareholders, not within the country of origin.

Most of sub-Saharan Africa, for instance, has in recent decades suffered negative adjusted net saving by this measurement, especially during the rapid commodity-related rise in gross national income (GNI) beginning in the early 2000s. By adding North African countries where mineral wealth is poorly managed – especially Libya since 2011 – the overall African depletion of wealth is acute, given that natural capital ranges between 40 and 55 percent of Africa’s overall wealth.

As a footnote, World Bank researchers were confounded by platinum and diamond markets, and so simply left them out, hence dramatically underestimating the wealth and depletion process in some countries, such as South Africa, Zimbabwe, Botswana, Namibia, Angola, the Democratic Republic of the Congo, Sierra Leone, and Liberia.

But even with that caveat – neglected platinum and diamond extraction – the Bank concedes that since 2000, between 2 and 3 percent of the region’s reported income has been depleted annually without offsetting compensation, an amount typically exceeding $100 billion. This growing ecological debt owed by the North is greater even than Africa’s estimated Illicit Financial Flows associated with tax dodging and other accounting gimmicks, typically around $50 billion annually.

In 2008, for example, the subcontinent’s GNI exceeded $1 trillion, but natural resource depletion was negative 15 percent, i.e., $150 billion. Likewise at the point of least net natural resource depletion (6 percent), in 2015, as commodity prices crashed, GNI was $1.5 trillion so the total net outflow on resource accounts was at least $90 billion.

 Uses, nonuses, and abuses of natural capital

There are temporal and spatial aspects of this natural capital accounting methodology, especially in allocating ecological debt owed to future generations and those currently in the sites of extraction. But what is most important to point out here is that in subsequent years, a related concept – the resource curse – took two distinct turns without referring to this work:

  • on the one hand, a blame-the-victim concern with Third World elite inadequacies during negotiations with transnational corporations that is evident both in the academic literature (e.g., Humphreys, Sachs, and Stiglitz 2007; Robinson, Torvik, and Verdier 2006) and applied projects (e.g., the Extractive Industries Transparency Initiative and Publish What You Pay); and
  • on the other, a grassroots anti-extractivist agenda witnessed in thousands of anti-mining and anti-oil protests, many of which demanded that resources be left underground.

The moderate NGOs rely on a simple philosophy to reform extractive industries: transparency can sanitize the process of corruption. Hence, they pay most attention to payment flows, project damage mitigation, Free Prior and Informed Consent (a United Nations mandate that genuine community consultation and permission should be acquired before extraction), and other assimilationist reforms, typically ignoring both grassroots resistance and natural capital depletion.

What the two strands of this argument now suggest should be obvious: both Intergenerational Equity and North-South equity are at stake. Both kinds of ecological debt must be openly acknowledged.

Hence we adopt the strategy of “counting nature” in order to identify withdrawals from poor areas and countries – not as an endorsement of ecological modernization, and certainly not so as to price and therefore market the environment, but to value it, so as to and halt the unjust extractivism still ravaging resource-rich countries and to count and demand reparations as ecological debt.

In contrast, Pavan Sukhdev’s strategy is termed “The Economics of Ecosystems and Biodiversity” (TEEB 2020, 1). It aims to “make nature’s values visible” so as to “help decision-makers recognize the wide range of benefits provided by ecosystems and biodiversity, demonstrate their values in economic terms and, where appropriate, capture those values in decision-making.”

Such mainstream thinking is that “capture” can be accomplished by market mechanisms (such as carbon trading). We consider these utterly inappropriate, for instance because natural assets have characteristics unsuitable to speculative financial markets (Bond 2012).

Indeed, there is an extraordinary tension built into this debate, with vital strategic implications about whether anti-extractivist grassroots movements as well as transparency-based NGOs and solidarity advocacy groups should take up this methodology of valuing nature and demanding ecological debt repayments in coming years – for example as a means of avoiding further extraction such as in Ecuador’s Yasuni Natural Park (Bond 2012, Leave Fossil Fuels Underground 2018).

Those from a critical perspective who reject natural capital accounting on methodological and political grounds, such as Sullivan (2014), are not necessarily opposed to demands for reparations against those engaged in environmental damage. As she explains,

“In a move with which I am in broad sympathy, Sharife and Bond (2013) also argue that natural capital accounting and associated calculations might be mobilized in the course of reckoning ecological debt reparations, whereby retributive payments for ecological debt are based on both loss and damage accounting and environmental justice, and made through fines for damages and prohibitions on further pollution.”

The latter strategies – i.e., fines and prohibitions – are entirely different than the objective of ecological modernizationists who insist on simply imposing fees (e.g., the “payment for ecosystem services” concept) so that pollution can continue.

And as for the methodology associated with ecological debt quantification, Joan Martinez-Alier (2002, 228) concedes, “mea culpa. My excuse is that the language of chrematistics is well understood in the Borth.”

In other words, by taking the neoliberal conception of market valuation on its own terms, the case can still be made that extractivism should be halted in most situations, given that the declining wealth cannot justify the (maldistributed) rise in short-term income.

But aside from a conceptual agreement about the validity of ecological debt, Sullivan and other critics of monetizing nature do not do justice to our concerns about temporal (intergenerational) and spatial (unequal ecological exchange) injustices associated with depleted natural wealth.

Nor do Sullivan and other critics envisage a route by which halting such injustices through activist critique may entail recourse to full-cost accounting – e.g., in Environmental Impact Assessment critiques of resource-extractive projects (see, e.g., Basu 2017; South Durban Community Environmental Alliance 2019).

However, we do agree with profound aspects of the critique of natural capital accounting. For example, Sullivan (2017, 408) is absolutely correct to remark on other deficiencies of ecological modernist conceptions: “diversities are lost in the world-making mission to fashion and fabricate the entire planet as an abstracted plane of (ac)countable, monetizable and potentially substitutable natural capital.”

Adds Patrick Bresnihan (2017, 44), “The enthusiasm for economic valuation methodologies should not obscure the continued significance of questions of ownership, uneven distributions of power, and the distribution of environmental goods and bads.” These kinds of warnings we appreciate, and we agree that researchers and policy-makers – and especially serious activists – must be acutely aware of dangers associated with natural capital accounting.

 Resistance narratives mature

It should now be evident that exceptionally high outflows of resource-related wealth with which we are concerned can be understood as both temporal and spatial modes of systemic impoverishment. Or, recall another vocabulary that harks back to Rosa Luxemburg’s 1913 critique of capitalist/non-capitalist relations in resource-rich colonies, “accumulation by dispossession” (Harvey 2003).

The most important reflection of the heightened intensity of this process since the early 2000s is that citizen groups, journalists, and researchers are beginning to recognize how important it is to halt the illegitimate offshoring and intergenerational transfers of wealth from these resources.

Perhaps the most urgent and profound intergenerational message for future advocacy narratives is that climate breakdown requires fossil fuels to be left underground – and with a compensation arrangement for governments and peoples in poor countries, as was attempted in the Yasuni National Park of Ecuador from 2007 to 2013, albeit unsuccessfully (Leave Fossil Fuels Underground 2018).

We do not need to dwell upon this obvious conclusion, aside from remarking that what Naomi Klein termed the “Blockadia” concept – i.e., disrupting fossil fuel extraction, refining, and transport – is well underway (EJAtlas 2019; Klein 2014;).

Of course, the extraction of certain classes of hydrocarbons can certainly be justified even in a climate-conscious society, assuming that this could be accomplished without contributing greenhouse gases – i.e., the fossil fuels would not be combusted for wasteful energy or transport purposes – for the sake of the myriad ways they are used in the production of necessary goods (pharmaceutical products, synthetic materials, and even some vital forms of plastic).

Indeed, we anticipate the phrase “minimally necessary extraction” to become increasingly important, especially as the “degrowth” philosophy becomes more popular in coming years (Bond 2019; Kallis and March 2015).

As for the value transfer problem, the rise of citizen awareness is occurring in part through campaigns against Illicit Financial Flows associated with multinational corporate tax dodges, especially in the resource-extractive industries. To combat such flows, the international Publish What You Pay NGO network feeds into the Extractive Industries Transparency Initiative – innocuous enough to be endorsed by many states and extractive-sector corporations – and “Stop the Bleeding” campaign in Africa.

However, important though they are, such transparency and anti-corruption narratives alone have not proven to be a solution, since they explicitly ignore the depletion dilemma.

The same problem exists in most community-based struggles against the local pollution and social damage that is done through resource extraction. In some such cases, to grapple with resource depletion as a concept would drastically interfere with an NGO reform agenda that simply polishes the rough edges of mining so that it can continue with more legitimacy.

This latter process is evident in the annual Cape Town “Alternative Mining Indaba” (opposed to the mining industry’s simultaneous conference), which became so stultifying (Maguwu and Terreblanche 2016) that an alternative Thematic Social Forum on Resisting Mining and Extractivism – stressing “the right to say no!” – was founded in 2018, in Johannesburg.

This resistance was not merely theoretical: in 2015, a year in which $80 billion in new mining was undertaken, those advocating for leaving minerals underground managed to block a vast share of mining. Anglo American Corporation Chief Executive Mark Cutifani estimated, “There’s something like $25 billion worth of projects tied up or stopped” (Kayakiran and Janse van Vuuren 2015).

In other cases, there is also a growing awareness about the dangers of licit – albeit immoral – resource value transfers, in which formal contracts legalize the (uncompensated) extraction of wealth across time and space.

This was the conclusion that even a Financial Times journalist, Tom Burgis, arrived at after reporting on extreme levels of uncompensated extraction in the Global South: “keep resources in the country and implement high tariffs to protect domestic industries” (quoted in Monks 2018).

Others have called for sovereign wealth funds to continue extraction, but slow the geographical flight of wealth by ensuring community trusts or national funds are replenished en route.

We argue on behalf of a much more depletion-conscious narrative that pays tribute to future generations’ needs and to local citizenries who are currently not well served by the prevailing mode of extractivism. We have learned of creative resistance to extractivism from both activists and intellectuals.

The former have driven public policy in all spheres of life, and anti-extractivism is one of the most powerful recent trends, as witnessed in February 2021 when the Ecuadoran presidential election featured an indigenous candidate winning nearly 20 percent of the vote, ultimately preventing the centre-left extractivist candidate from winning outright (although a neoliberal banker won instead).

And in public policy, as an example, the Goa experience includes advocacy that resulted in a 2019 National Mineral Policy statement: “natural resources, including minerals, are a shared inheritance where the state is the trustee on behalf of the people to ensure that future generations receive the benefit of inheritance. State Governments will endeavour to ensure that the full value of the extracted minerals is received by the State” (Government of India 2019, 11–12).

While few activists have publicly grappled with the enormity of the continental-scale resource depletion problem – i.e., the conservatively estimated $100 billion drawn down from sub-Saharan Africa’s natural wealth annually (not including the platinum and diamond sectors) – at least at the local level, their anti-extractivism is enhanced by showing how economic degeneration results from a net decline in natural capital.

To illustrate, in eastern Zimbabwe’s notorious Marange diamond fields, bottom-up resistance has generated not only courageous protests but also arguments against extraction that deploy natural capital accounting.

According to Marange’s main civil society watchdog, Farai Maguwu (2016, 5) of the Center for Natural Resource Governance, “mining is a disaster unfolding across Zimbabwe. Mining is creating an enclave economy full of white-collar criminals, who make virtually no positive linkages to the broader Zimbabwean economy. They simply deplete our natural capital and provide an inconsequential return.”

Likewise, the Zimbabwe Environmental Law Association finds that “Diamond revenue represents natural capital depletion and, therefore, its expenditure should be judicious” (Sibanda and Makore 2013, 29). In 2016, then President Robert Mugabe admitted an exceptional level of injudicious extraction: “We have not received much from the diamond industry at all. I don’t think we have exceeded $2 billion, yet we think more than $15 billion has been earned” (Magaisa 2016).


A combination of the geographical and generational justice agendas will be required to make headway against excessive resource depletion. For those engaged in critical scholarship who have been skeptical of natural capital accounting (for very good reasons we acknowledge), our appeal is to consider whether that opposition risks becoming politically disempowering:

  • first, it allows ecological-debt denialists to avoid facing up to the scale of damage done by an extractivism that favors the Global North and current generations and,
  • second, this technique - as we advocate it, shorn of market mechanisms – can usefully add pressure against mindless extractivism, whether as national economic policy or so as to augment campaigning by grassroots activists (such as we believe occurs fruitfully in Goa, South Durban, and eastern Zimbabwe as just three example sites).

To move the agenda back to a general ideological level, away from the environmental economists and other ecological modernizationists whose market techniques will continue to distract attention from justice, it may be that an ecofeminist approach will be required to compel civil society to take up these matters properly.

In Africa, the leading network that advocates further praxis-oriented research along these lines is the Johannesburg-based African Women Unite Against Destructive Resource Extraction, or WoMin. In coming years, WoMin proposes a full-cost accounting sensitive to ecofeminist principles, one that extends from a “social reproduction” (Mitchell, Marston, and Katz 2012) analysis of how male labor gets to the point of production within the extractive circuits.

The analysis incorporates (gendered) small-scale agricultural production systems on the land that are increasingly threatened by extractivism (e.g., land grabs and air-water-land pollution). It considers women’s burdens during climate breakdowns due to fossil-fuel extractivism. And it acknowledges the de facto responsibility that women are given to steward life itself (including ecological inheritances) into future generations. As the organization explains:

“WoMin will deepen its efforts to foreground a feminist analysis of costs, showing that this places particular burdens on the cheap and unpaid labor of impacted women. We will grapple further with the problematic of costing damage and impacts, immediately and on a cumulative basis, to show that an extractivist model of development does not advance people and their economies, but rather destroys and immiserates them.
“We will show the inter-generational costs of extractivism and we will work to argue that Africa and African nations are losing sovereign wealth through extractivism and only becoming poorer. These efforts lay the basis for advocacy and campaigns to build wider popular and public consciousness, build the grounds for advocacy on development alternatives, as well as advocate and campaign to force the internalization of real costs, which would render the majority of projects unsustainable.” (WoMin 2019, 9)

If many of the world’s mining and fossil-fuel projects are indeed determined to be unsustainable – once a full accounting of costs is accomplished, with consciousness about who wins and loses, across time and space, while avoiding market strategies for compensation – then ultimately this is the basis for moving from the field of ideas to a more confident rejection of status quo extractivism, both by activists and perhaps also by conscientized policy makers. It is also one basis for claiming that an ecological debt must now, at long last, be reckoned with.

Only then can society end what is now the uncompensated and often unnecessary extraction of nonrenewable minerals, oil, and gas. Only then can ecological reparations for the debilitating injustices of resource extraction be justly demanded.

In sum, the times and the spaces in which we engage and promote radical forms of natural capital accounting are, potentially, just scratching the surface of a more general strategy for environmental, sociocultural, political-economic, geographical, and intergenerational justice.

Bond teaches at the University of the Western Cape School of Government and Basu is based at the Goa Foundation. A different version of this article is forthcoming in The Routledge Handbook of Critical Resource Geography, edited by Matthew Himley, Elizabeth Havice and Gabriela Valdivia. London: Routledge, 2021.


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Patrick Bond

is professor at the University of Johannesburg Department of Sociology, and co-editor of BRICS and Resistance in Africa (published by Zed Books, 2019).



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