There Goes Our Budget…. Again!

Imagine that on January 1st you have a nest-egg of $365,000.  Imagine too, that you spend $1,000 every day following.  Imagine that you are a savvy investor and you are able to generate $1,000 every day.

Now do the arithmetic.  It’s easy.  You start the year with $365,000.  During the year you spend $365,000, and you also generate $365,000.  So, at the end of the year, on 31 December, you have $365,000 in your account. 

You can now begin the next year with your nest-egg of $365,000 intact.

Now, imagine that you increase your spending by $100 a day.  You now spend $1,100 a day, and you generate $1,000 a day.

This time the arithmetic is a little harder, but not too difficult.  By the end of the year your nest-egg will have decreased to $328,500.

Imagine that you do nothing to correct this overspend; instead, you increase your spending.  And if you do this every year then each year your nest-egg will decrease quicker and quicker.

If you wanted you could even work out the date each year on which your spending outstripped the amount you generate each year.

For example, using the figures from above.  Spending $1,100 each day it would take you 332 days to spend $365,000.  You would have spent your years generative amount by 29 November.  During December you would effectively be stealing from your nest-egg.

So, you could work out year by year the date on which your spending outstrips the rate at which you are able to generate income.  You could, if you wanted, call this the day you overshoot your budget for the year.

Earth’s Budget

Now imagine that the same arithmetic is applied to the rate at which we humans spend the resources of the Earth and the rate at which the Earth is able to replenish those resources.

It turns out that some mathematical boffins have been doing exactly that for the past 50 years or so.
According to their equations, prior to 1970 we were “spending” the Earth’s resources within budget.
But then we became more spendthrift and the day on which we overshot our budget worked out to be a few days before the end of the year.  By the end of the 1970s Earth Overshoot Day (as it came to be known) was late October.¹  By the end of the 20th century we were overspending Earth’s budget even earlier – by late September.

This year Earth Overshoot Day is the same date as last year, but still as early in the year as 29 July (the day on which this blog is published).

We all know what happens when we overspend our budget at an increasing rate – bankruptcy.
That is what we are doing with Mother Earth – bankrupting her.

Some Spend More

You may be inclined to think the increasing population is the reason for this overspend.  That is only part of the reason.

For some nations their day of overshoot is much earlier in the year.  For North America, Australia, Kuwait and the U.A.E. the date falls in March – at least four months earlier than it does for the Earth as a whole.  The Scandinavian nations overshoot during the month of April, and most of Europe have overshot during April and May.

New Zealand and Japan overshoot on May 6 and 13 respectively.

China, the most populous nation on Earth overshoots this year on June 14th – between one and three months later than the western-styled nations. India overshoots in late June.   Indonesia, the world’s 4th largest nation in population size does not overshoot until December 18th.

I seems that the biggest driver of overspending our Earth budget is quite literally – over spending.  The consuming power, and consumption addiction, of western-styled nations is what drives Earth Overshoot Day. 

We in the western cultures need financial counselling.  We have to seriously curb our spending, our consumption and our continuing grab for Mother Earth’s resources.

We cannot continue to use up the Earth’s resources at a faster and faster rate.  We have to get serious about our addiction.  That means we must face up to who we are and what we have become.

Note:
1. see https://www.overshootday.org/