Intergenerational Transfer of Environmental Assets. Gregory Savioz-Buck and Emily Fowler, Impact Investing Interns.
Transferring assets between generations is a natural part of human evolution. In addition to monetary assets, between generations people pass on their wisdom, knowledge, opportunities, etc. It is a natural phenomenon. Usually, such assets retain or even gain value. For example, women today have more opportunities to make use of their assets than did the generation just before us. Sadly, the environment is an exception. For the first time in recent human history, our environmental assets (air, water, land and a stable, continuously life-supporting environment) may have lost value as they have been transferred from one generation to the next.
In contemporary Western economies, it is normal for generations to pass down debt. For example, between the 1980s and 1990s, the national debt increased from $908 billion to $3.233 trillion. In 2000, the national debt was $5.674 trillion. But this number grew to $13.562 trillion by 2010 and exceeded the debt cap of $30 trillion in 2022. What’s more, according to one article, you need to add the more than $115 trillion that the government has to pay for programs like Medicare, Social Security, etc. to the debt total. The population increased along with the national debt (227 millions in 1980 to 336 millions in 2022), as did the ease with which people can buy goods. So did the need for transportation. This significant increase in debt over the last 40 years, combined with a crippled natural environment, leaves our generation in a seemingly impossible situation, a deep financial and environmental hole that our generation will likely spend the rest of our lives trying to climb out of.
An easy way to think about this intergenerational transfer concept is by comparing it to a family car. Imagine your parents have a brand new car, but they don’t maintain it, the windshield cracks and they don’t fix it, and then...they give it to you. Now you’re stuck with a broken car, and the more you use it, the more the crack in the windshield expands. The condition of your car worsens, even though it isn’t your fault. It was your parents’ responsibility to fix the crack they created. But now, it’s your problem. This is the planet that our parents are passing down to us, like a car with a cracked windshield. Instead, it is an overheating and dying planet.
We’re supposed to be smarter than the other animals, that’s the whole point of human civilization. Animals react to what is immediately happening to them in the moment. We are supposed to be able to observe and anticipate future problems and the consequences of our actions, and to make better choices that ensure the survival of our species. Yet we continue to react to climate events in the moment, ignoring obvious warnings and the preventive measures we could take. Instead we clean up after a tornado and mourn our lost ones when we could have saved them by acting sooner. And the reason we are not making better choices is because it pays not to act, to support polluting practices and industries. In the pursuit of personal wealth, we are not making good use of the gift of human intellect. We are, instead, behaving like any of the other animals we claim to be superior to.
Sources
Main article and research: Gregory Savioz-Buck and Emily Fowler, Impact Investing Interns.
Editor: William Michael Cunningham