The horizon of the debt mountain prevents our leaders from properly posing the problems. Despite the alarm cries of the scientific community on the issue of climate change and the unprecedented risks to which the vast majority of humanity is exposed, the economic paradigm remains marbled. Preserving the resources and ecosystems necessary for life versus budget equations to be balanced and debts to be repaid - that's the poker game being played today. Meanwhile, the clock is ticking.
According to the latest INSEE estimates, French public debt stood at EUR 2,358.9 billion in the first quarter, i.e. 99.6 % of GDP. As a result of 45 consecutive fiscal deficits, this debt reduces our room for manoeuvre at a decisive moment in our collective history - even if the deficit were to be slightly higher than anticipated in the 2020 budget. For how could we hope to respond effectively to the major challenges of the 21st century?e century, with ecological transition in mind, if the strategic State remains locked in an accounting and short-sighted vision of its finances, to the point of setting as a major objective the stabilization of the debt below the symbolic bar of 100 % of GDP ?
A common horizon and common goals
Such a vision prevents us from posing the problems properly. What better example to illustrate this than the debt of French newborns? According to the figures commonly put forward by our leaders and certain economists, every baby born in France has already contracted a debt of several tens of thousands of euros.
In addition to ignoring the issue of theFrench asset (each newborn also inherits a fraction of our national heritage), such an approach is inadequate in two respects. First, because if our inaction leads us to mortgage the future of this newborn child, he or she will be hard pressed to pay off the debt. Second, because such a problem cannot tolerate the static reading imposed by an indicator that mixes stocks and flows indiscriminately.
Several generations will succeed the current one, and they will be united in assets and liabilities. As a result, these thousands of euros of individual debt should be diluted over the next few years. n generations, n corresponding to life expectancy - potentially endlessly long - of the state. For all of these reasons, the question is not so much what is the time horizon for repaying the State's debt, but how to provide a horizon for this child who has been born, and for all those yet to be born.
The spectre of a crisis without borders
This question has a special resonance as the 2019 edition opens on September 23rd. of the Climate Action SummitThis will be the first time that the United States has made a commitment to address the climate emergency. However, according to the latest IPCC report, containing the increase in global temperature to +1.5 degrees cannot be envisaged without a drastic reduction of 45 % of greenhouse gas emissions by 2030.
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Such an abrupt paradigm shift would have major repercussions from both a human and economic point of view, resulting in migratory waves of unprecedented magnitude, as well as the strong international tensions under the control of thewater This objective is of crucial importance at a time when alarm bells are ringing in the scientific community. These include, for example, the rising water on the coasts (which has even recently prompted Indonesia to consider move his capital from JakartaThe collapse of the agricultural returnsor the water shortages leading to conflicts of use, including in European countries.
The emerging crisis scenario will have no geographical or generational boundaries. A post published in the American scientific journal PNAS in 2018 states that, even if the Paris Agreements are respected, the Earth will experience chain reactions that will lead to temperature increases of +4 to +5 degrees compared to the pre-industrial period.
Whatever the scale of the crisis, we can nevertheless collectively give ourselves the means to change it. However, the ecological transition is facing a structural funding problemThis is especially true in Europe, where the Stability and Growth Pact requires States to manage their finances rigorously.
Let me get this straight. On the one hand, the preservation of the resources and ecosystems necessary for human life. On the other hand, budgetary equations to balance and debts to repay. Some researchers see all the "dilemma" of political ecology.
Others, a dizzying gap between the issues at stake and the means of action actually implemented. If the challenge is to avoid a sixth mass extinctionIn the light of the above, why deprive ourselves of more ambitious and determined public policies focused, for example, on the thermal renovation of housing, the resilience of cities, the scaling up of public transport, or the creation of hydrogen/methanization excellence clusters?
Decision-makers playing poker
The lack of action is all the more worrying since, in addition to generating a positive return on investment and contributing to the fight against global warming, investments of this nature are also bulwarks against various social conflicts. It is now recognized that rising temperatures have political consequences that can foster instability and insecurity, and explain the rise in murder, rape, petty theft and other crimes and offences. Beyond that, a dire scenario is emerging: the scarcity of resources could lead to extreme stress situations on the markets and lead to major social and armed conflicts.
We are already witnessing this in Syria. And a fair duty to remember reminds us that from the French Revolution to the Ottoman and Roman empires, many conflictual cycles of the past can be explained through the prism of the scarcity of resources and/or of the severe weather events. Do we really want to believe that identical causes could lead to different results?
In some ways, the situation we find ourselves in is akin to the reflection of the poker player in a state of uncertainty. His first option is to "pay to see" to give himself a chance to pocket the pot, but also at the risk of losing everything. Conversely, his second option is to "fold" to buy time at the table, glean information, and choose less uncertain moves.
When it comes to our problem, "paying to see" would push our leaders to pursue a "pay to see" approach. business as usual which has every chance of maximizing short-term profits, but also mortgages the long term. Conversely, the latter could choose to revise their strategy, to "buy time", which in this case could result in coordinated action on a global scale and a change in some of the institutional rules of the game. The main difficulty lies in reconciling the long time of nature with the short time of the economy, political (leaders) and citizens.
This tension had moreover been formulated as early as 1975 by anthropologist Margaret Mead, who said at the time:
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"If the peoples of the world do not make the effort to grasp the disproportionate and long-term consequences of what at first appear to be small, instantaneous choices, the entire planet could be at risk.
However, neither political mandates, nor economic cycles, nor even human life have a sufficiently long horizon to bring human activities into line with the long time span that nature demands. No individual, company or even State, however responsible it may be in its policies, production or consumption patterns, has the power to influence the trend by acting unilaterally. Faced with this abyss of powerlessness, the temptation is even greater to favour short-term individualism, to keep things as they are even when they are known to be contrary to the public interest..
The fact that the most obvious negative externalities first affected the distant populations has also largely contributed to a certain immobility coupled with an illusion in Western countries: due to inertia, the merry-go-round continues to run, but the party is long over.
No salvation without reinvigorating institutions
The fact is that the climate wall and all its most disastrous consequences cannot be avoided without the help of strong and perennial supranational institutions, which are resisting the temptation of the climate change. lobbyingto political salvoesand the interests of individuals first. self-conscious. More than ever, their mission must not be to scrupulously ensure that archaic treaties are respected, but to federate the players, to catalyse progress, to facilitate the emergence of new markets and skills, while accompanying the decline of the legacy of the industrial revolutions. And more than ever, our duty is to strengthen rather than weaken them, even if the winds of the 21st century are blowing hard. protectionismof the nationalism and theobscurantism.
International institutions are the only ones able to steer the economy towards production and consumption patterns that safeguard a future for present and future generations. Not by justifying all our inactions by the debt they would have to bear, but, on the contrary, by massively and immediately financing the fight against climate change, which is the only guarantee for the future.
At a time when the climate peril is sucking us in, public debt continues to be presented as a burden and to be combated by the European authorities. As we conclude this article, let us dare to ask ourselves some questions: will we be able to face the judgment of our children if we have no other justification for inaction than a budgetary rule based on no economic basisWhat is the reason for the arbitrary setting of an annual debt ceiling of 3 % of GDP? Does the nature of the issues at stake not deserve that spending be directed towards the ecological transition? have emerged from the Solidarity and Growth Pact ? For what is the point of being alarmed at the indebtedness of future generations if we create, yesterday as today, the conditions for our own extinction?
Philippe NaccacheAssociate Professor, INSEEC School of Business & Economics and Julien PillotProfessor and Researcher in Economics and Strategy (Inseec U.) / Pr. and Associate Researcher (U. Paris Saclay), INSEEC School of Business & Economics