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WATCH OUT, DEAR SWITZERLAND! Too Small to Act Or Too Exposed to Wait?

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WATCH OUT, DEAR SWITZERLAND! Too Small to Act Or Too Exposed to Wait? Global Footprint Network 18, Avenue Louis-Casaï 1209 Geneva, Switzerland [email protected] www.footprintnetwork.org WATCH OUT, DEAR SWITZERLAND! Too small to act or too exposed to wait? Assembled by Mathis Wackernagel We are proposing a plan of action. It is a fresh plan because we now live in a new era of climate change and resource constraints. Switzerland has been economically successful. And if we choose wisely, Switzerland can stay successful. But will we? Today’s resource paradox Despite its limited natural resources, Switzerland shines as one of the world's most competitive and innovative economies, with low unemployment, a highly skilled labour force, and a per capita GDP among the highest in the world.1 But can this success last, given growing ecological constraints around the globe and the multi-faceted impacts of climate change? Is it necessary to stay within 2°C warming as the 2015 Paris Climate Agreement stipulates? 2 If we do not curb our emissions, will climate change increase the resource pressure and its unpredictability? Switzerland is already heavily resource dependent. For instance, the country eats twice as much as it can grow. As a whole, it consumes four times as much as Swiss ecosystems can regenerate.3 It does this even though Article 73 of the Swiss constitution urges that “Confederation and the Cantons shall endeavour to achieve a balanced and sustainable relationship between nature and its capacity to renew itself and the demands placed on it by the population.” Given the new era of climate change and resource constraints, what does Switzerland need to do to remain successful? Opinions vary widely, yet the stakes are high. Does resource dependence pose a significant risk to Switzerland? Or is it largely irrelevant, as current policies and investment patterns imply? These essential questions highlight the inescapable fact that Switzerland is at a crossroads. What are our options? Before outlining our response, we discuss why business-as-usual is less and less viable. Getting Switzerland’s resource capacity right is critical for food, energy, transportation, urban planning, economic stability, international relations, and any other activity enabling Switzerland’s success. In an overused and overstretched world, resource sovereignty becomes an ever more significant driver of a successful economy. WATCH OUT, DEAR SWITZERLAND! ¦ Version: August 26 ,2016 ¦ Global Footprint Network Page 1 of 13 What we already know about our resource situation Despite the many uncertainties, some aspects are already clear. What does Paris tell us? The 2015 Paris Agreement stipulated: i. Assume that increasingly tight global Global warming should remain well resource trends are a given. These below 2°C, possibly even 1.5°C above persistent trends only shift slowly. It is pre-industrial levels. possible that they can be redirected, but given the current level of weak Avoiding an increase over 2°C international cooperation, it is requires, according to IPCC reviewed improbable. Ecological constraints climate models, less than 450ppm emerge as slowly as they can be CO2e. atmospheric concentration. overcome. These constraints refer to the Further, 450ppm may be on the high planet’s weakening “supply” whether it side, particularly for Paris’ postulated is climate change, receding ground 2°C upper long-term limit. water, land erosion; or whether it is the “demand side”: population growth and In 2016, the atmosphere contained 407 ppm CO Currently, humanity’s the intensification of resource- 2. emissions increase the CO2 dependent infrastructure. Some nations concentration by 2.1ppm per year. are taking steps toward strengthening their resource sovereignty, especially on If we include non-CO2 greenhouse the energy front. Despite those efforts, gases, the current concentration may changes are slow to manifest because of be at 470 ppm CO2e already. the inherent inertia of built infrastructure and the long time-delays In other words, humanity has governing population size. Turning the between minus 10 to plus 20 years of trends in the long run is possible, but current emissions left to comply with the shift cannot occur from one day to Paris. Minus ten means humanity should have stopped emitting ten the next. years ago. ii. Despite the proclaimed intents of the In Paris, Switzerland proposed to Paris Agreement, efforts to reduce its aggregate CO2 emission decarbonize are not yet spreading at 50% by 2030 compared to 1990 the required speed and scale to achieve levels. In 2012, they were 97% of the necessary results.4 For instance, we 1990 emissions. still lack a clear plan and concerted efforts to exit the fossil-fuel economy. Yet nothing less is required to reach sustainability — in parallel to lowering the current demand for biological resources.5 Humanity’s demand – its Ecological Footprint6 – is currently 60% higher than what the Earth can renew — without even taking into account the fact that the 10-100 million wild species with whom we share the Earth also need space and resources. At the current level of demands on nature, humanity no longer operates in a safe resource space.7 WATCH OUT, DEAR SWITZERLAND! ¦ August 2016 ¦ Global Footprint Network Page 2 of 13 iii. Climate change and tightening resources Biocapacity: the ultimate are turning the global economy into a resource negative sum game. Ecological overshoot is The Ecological Footprint is the inevitably leading to the liquidation of natural biologically productive area capital. In addition, less natural capital needed to provide for everything amplifies the potential for overshoot. With people use: fruits and vegetables, weakened natural capital it becomes more fish, wood, fibers, and absorption difficult to adequately power the global of carbon dioxide, space for economy. Paradoxically, expanding the buildings and roads. resource hungry economy, undermines the Biocapacity is the productive area economy’s ability to operate. The global that can regenerate what people economy turns into a negative-sum game. demand from nature. As we phase out fossil fuel -- as anticipated in most imaginable scenarios -- iv. In the current situation, the “Tragedy of the biocapacity will not only have to Commons” is tragic but not that common. feed us. It also will have to help us No doubt, this negative sum game driven by replace fossil fuel. Therefore, resource liquidation has “Tragedy of the mapping an economy’s material Commons”8 elements. Examples thereof are dependence on biocapacity CO2 emissions from fossil fuel in the provides an overarching view on atmosphere or fishing in international waters. an economy’s material dependence. But there are also significant elements in the www.footprintnetwork.org global resource dynamics that are NOT driven by a Tragedy of the Commons: overusing ecological assets within the country or building resource-intensive infrastructure or infrastructure promoting more resource use910 . They likely will turn into future stranded assets. While the time of occurrence of such feedback may be hard to predict, the types of impacts are foreseeable. Still, acting against this negative sum game can be difficult, particularly if corrective actions are costly now while the gains are only harvested later. Quick, automatic adjustments of Switzerland’s resource consumption are unlikely, since most of them are determined by drivers with large inertia such as urban form, energy efficiency of the housing stock, transportation infrastructure and population size. v. Exceeding many others’ environmental performance alone does not make Switzerland safe. Contrary to what is often assumed, Switzerland is not always environmentally best-in-class, for instance compared to 13 OECD benchmarking countries as outlined in a report prepared by BakBasel and Global Footprint Network for the Swiss government. 11 Even if it were better than all the reference countries,12 this would not automatically make Switzerland immune against resource risks. vi. What really matters in the race for global biocapacity is relative GDP. Assuming that resource security is pursued through market exchanges rather WATCH OUT, DEAR SWITZERLAND! ¦ August 2016 ¦ Global Footprint Network Page 3 of 13 than military means, winning in this current competition for the world’s limited biocapacity depends on maintaining or, better, increasing one’s relative income. What matters is not what I earn in absolute, but compared to what everybody else can spend on the resources for which all compete. Even if the “globalized economy game” remains stable and the WTO acts as the benevolent steward of international trade,13 the global auction for the world’s limited resources will get harder and harder. Maintaining success in accessing the dwindling natural capital from abroad will become harder for economies whose relative income recedes compared to the rest of the world. This is already happening for most high-income countries vis- à-vis the emerging economies. The Swiss resident is now taking home a 30% smaller share of the global income than 25 years ago, and a 45% smaller share than 35 years ago. Therefore, Switzerland is caught in a bind: less and less relative income for Swiss economic agents as they are competing in the purchase of ever scarcer resources. vii. Planning to win the relative income game forever is a fragile strategy. Switzerland still may be able to outcompete all the other countries economically for many decades to come. But the odds of winning this bet are getting smaller, and the continuous ability to outperform all others is definitely not guaranteed over longer time periods. viii. Exiting the current game, too, has significant risks and costs. To not be exposed to this competition would mean to leave the global economy. But withdrawing from the global economy does not generate the necessary resources for the Swiss economy to operate, nor does it produce goodwill in the world — which Switzerland’s trade relationships depend on. In other words, how can Switzerland keep engaging with the world while depending less on it? ix.
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