While there are many issues around the types and definitions of money that economists argue about, as well as how to measure it, all agree the global money supply has grown significantly over the past century. And it grows more each year as GDP grows. Since money represents a claim on resources (natural or manufactured), this means that more and more of the world’s resources have a claim against them.
This is a problem as we are currently consuming close to 100 billion tons of raw materials a year to satisfy these money claims. The majority (about 90 percent) of these raw materials are non-renewable, and we are also drawing down renewable resources faster than they can regenerate. This is the phenomenon of ecological overshoot and represents serious existential risks to humanity, of which climate change is only one example.
This process of using natural resources to convert into goods, which are then converted into money, means we are liquidating our natural capital to convert it into financial capital. It raises the question as to which is more valuable, natural or financial capital. Clearly, both are important, but what is the right balance?