Matt’s links: Grexit or debt writeoff, and the sixth mass extinction

Greece: A ponzi scheme with no end in sight (Eric Reguly, The Globe and Mail). Reguly provides a succinct summary of Greece’s economic death spiral: They are drifting from bailout loan to bailout loan from the IMF, the European Union (EU) and the European Central Bank (ECB). Each loan comes with conditions requiring Greece to put in place further austerity – higher taxes and reduced public spending – which further weakens Greece’s economy such that they need further bailouts. It’s a vicious cycle with no end in sight and no winners, except perhaps the creditors in the short term who make money off of the interest – which is why Reguly calls it a Ponzi scheme.

How to fix the problem? In the end, there seem to be only two options: let Greece default on its debts or allow them to write some of the debts off. If Greece defaults, it seems very likely that they would have to leave the Eurozone – a ‘Grexit’, as it’s been called. A debt write-off would require the ECB, the EU or the IMF to willingly accept a significant loss, which in the case of the EU or ECB would be very unpopular with taxpayers in Germany and France, who would bear the brunt (€60 billion) of the loss. But a default would result in an effective debt write-off anyway. A default would likely be more painful for Greece, because of the effect it would have on their interest rates and access to credit, combined with the likely upheaval associated with the loss of the Euro; but recent history in Argentina and Iceland, for example, suggests that medium-term recovery from national bankruptcy is possible.

In this light, Reguly argues that the path of least pain for all parties is probably a significant write-off combined with some Greek austerity, but much less austerity than is currently being demanded. If the creditors are unwilling to accept this, Reguly suggests that Greece may be best off swallowing its pride and accepting bankruptcy. Both options are painful but far better than the status quo.

The sixth mass extinction. Ecologists like me have been concerned for decades about the impact of humanity on the biosphere, particularly in the modern era of industrialization and global change. One of the primary concerns has been species loss – that habitat destruction, overharvesting, biological invasions, pollution and other threats will wipe out a large number of species. If such a mass extinction were to happen, it would be the sixth major extinction event that we know of in the fossil record.

Three landmark studies, all published within the last six months, have renewed this concern. The first, published in January in Science, called attention to species loss in the oceans. While the authors found recent rates of marine extinction to be low relative to those on land, they argued that the recent patterns of both extinction and human encroachment in the oceans have parallels to earlier patterns on land, such that more pronounced species loss in the oceans may be imminent. They also found evidence that habitat destruction (e.g., through coral bleaching, dredging, trawling, and shipping) is becoming an increasingly important threat to marine species, much like it is on land already.

The second study, published in Science Advances in May, focused on the 74 largest herbivore species (with adult body sizes >100kg; think rhinos, elephants, hippos). They found that 44 of these are threatened with extinction, of which 12 are critically endangered or extinct in the wild. Most of the threatened species are found in Africa or southeast Asia, and the authors argued that many are likely to be extinct by the end of the century unless significant actions are undertaken. Hunting, habitat loss (e.g., from deforestation), and livestock (e.g., via disease or competition for food) are the main threats.

The third study, published in June, also in Science Advances, tracked the rate of extinctions, both recently and in the fossil record, and argued that, even using the most conservative estimation methods, modern extinction rates are over 100 times greater than the background rate, suggesting that the sixth mass extinction event isn’t some far-off possibility; it’s probably already underway.

But enough doom and gloom. What can we do about it? One of the easiest and most far-reaching actions we can take as individuals is eating less meat. Most livestock are very inefficient biomass converters, which means that it takes tens to hundreds of pounds of grain (and lots of land and carbon) to produce one pound of meat. Among other things, eating less meat would significantly reduce pressures on terrestrial habitats and marine fisheries. What’s more, other studies have found that moderating our meat consumption would make us much healthier. Beyond that, we can lobby our governments to crack down on poaching and get serious about fighting climate change, and we can invest more in protected areas in species-rich ‘hotspots’ in the developing world tropics (which currently only receive ~10% of conservation dollars for protected areas), to name a few.


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