It’s not just the ecosystem, our economy is socially unfit too

Posted on by Dr. Trevor Hancock

A recent intergovernmental report found that in 2023, public and private expenditures of US$7.3 trillion had direct negative impacts on nature

Dr. Trevor Hancock

2 March 2026

699 words

Last week I discussed a couple of recent global-level reports that identify serious problems with our current economic system. In particular, the UN Environment Programme, in its 2026 report “Global Environmental Outlook 7”, found that human-created climate change, biodiversity loss, land degradation and desertification, and pollution and waste are undermining human wellbeing and “already costing trillions of dollars each year.”

The report recommended investing in the transformation of our societies and economies, because doing so will avoid or reduce these costs and will have huge economic benefits. Another report, this one in early February from the Intergovernmental Platform on Biodiversity and Ecosystem Services (IPBES) – the biodiversity equivalent of the Intergovernmental Panel on Climate Change – focuses on the relationship between business and biodiversity.

Prepared by a panel of public and private sector experts from 35 countries, the report found that in 2023, public and private expenditures of US$7.3 trillion, 2/3 of them from the private sector, had direct negative impacts on nature. These expenditures included “environmentally harmful public subsidies and private investment in high-impact sectors.”

Troublingly, that means governments are spending around US$2.4 trillion every year on environmentally harmful subsidies. Meanwhile, less than one-tenth of that amount from public and private sectors combined was “directed toward activities that contribute to the conservation and sustainable use of biodiversity.” Looks to me like the definition of insanity.

But it’s not just about the way our current economic and societal systems harms the planet. Suddenly it seems to be dawning on people – at least, some people – that our economy is socially unfit too.

Writing in Time Magazine on January 27th, Professor Olivier de Schutter, UN Special Rapporteur on Extreme Poverty, stated our economic system “is fundamentally unfit for purpose”. It “only ever serve[s] a tiny minority”, he wrote, adding “it will always do so at the expense of the planet and the vast majority of people who live on it.”

The authors of the 2026 World Inequality Report (WIR) write: “Inequality has long been a defining feature of the global economy, but by 2025, it has reached levels that demand urgent attention.” Indeed, frankly, the level of inequality has reached obscene levels. This is highlighted by a finding in the report that “fewer than 60,000 multi-millionaires, control today three times more wealth than half of humanity combined” – that is, more than the poorest 4 billion people!

More broadly the report notes, those 4 billion people – half the world’s population – have only 8 percent of the world’s income and only 2 percent of its wealth. The authors of the WIR make the point that “Reducing inequality is not only about fairness but also essential for the resilience of economies, the stability of democracies, and the viability of our planet.”

So in what conceivable way is this level of inequality fair, just and appropriate? Why aren’t those 60,000 people rushing to share their wealth – and if they won’t, why aren’t we taxing it and redistributing it? How many millions or billions does anyone actually need anyway? As in previous reports the authors make the vital point that “These divides are not inevitable. They are the outcome of political and institutional choices.”

In a forthcoming report to the UN Human Rights Council, Professor de Schutter will be presenting an action agenda to reduce extreme poverty that outlines some of the choices we need to take. His proposals fall under five pillars, with adaptive governance and participatory decision-making underpinning them all.

The first pillar is focused on “how economic systems can be reimagined to prioritise sustainability and wellbeing over consumerism and GDP growth.” It includes ideas about progressive taxation, subsidy realignment, tax enforcement and embedding social purpose in corporate activity. And there is much, much more.

The fact we are making bad political and institutional choices is not only true for inequality and poverty but for the public and private sector policies that lead us to spend vast sums of money on causing environmental harm and piddling amounts on protection and restoration. It’s time we changed the political choices we are making if we want to ensure the wellbeing of people and the planet for this and future generations.

© Trevor Hancock, 2026

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the

University of Victoria’s School of Public Health and Social Policy

Yes, there is a problem with our economic system – it’s unfit for purpose

Posted on by Dr. Trevor Hancock

The geopolitical state of the world is a minor inconvenience compared to the rupture we are creating in the ecological condition of the world.

Dr. Trevor Hancock

23 February 2026

701 words

In a recent article in the Hill Times, for which the prime audience is the federal government and Parliament, I noted that while Mr. Carney was right to identify a rupture in the world in his recent Davos speech, he focused on the wrong rupture. The rupture he focused on – the geo-political state of the world – is a minor inconvenience compared to the drastic impact of the rupture we are creating in the ecological condition of the world.

I have noted repeatedly in these columns that we have transgressed seven of the nine planetary boundaries identified by leading Earth scientists – and the trend for those seven is in the wrong direction and in many cases is accelerating. I have also noted that these changes are driven by a set of values that are not aligned with the realities of the finite planet on which we live, and that in turn drive an economic system that is not fit for purpose in the 21st century.

For example, when Kristalina Georgieva, Managing Director of the International Monetary Fund, says that a 3.3 percent global growth forecast is “beautiful but not enough“, this is clearly someone who does not understand what 3.3 per cent growth means. The doubling time is a bit over 21 years, so in a typical Canadian lifespan of about 80 years the global economy would grow more than 13 times.

How does anyone in their right mind, never mind a senior global economics leader, think the planet could sustain such growth when it’s already failing under present conditions.

But several reports from the UN, UN-related organisations and others in the first couple of months of 2026 have begun spelling out how unfit our economic system is. We should not be surprised that this chorus of voices is arising from the United Nations and its agencies. After all, their task is not to protect the economic and other interests of any particular nation, but to stand back and view the big global picture and protect the interests of humanity as a whole, which includes protecting the Earth on which we utterly depend.

First, in January, the UN Environment Programme (UNEP) published its seventh Global Environmental Outlook (GEO 7). Climate change, biodiversity loss, land degradation and desertification, and pollution and waste, the report warned, are undermining human wellbeing and “already costing trillions of dollars each year” – yes, trillions!

Climate change alone is estimated to have cost US$2 trillion over the decade from 2014 – 2023, and we know it’s only just beginning! Add to that the US$10 to $44 trillion cost annually attributable to the degradation of ecosystems and “the economic losses, exceeding US$8.1 trillion per year, associated with environmental pollution”. Moreover, the UNEP report states, “the damages from the global environmental crises will become increasingly severe over the coming decades”.

And yet, disturbingly, a group of researchers from the University of Exeter and the Carbon Tracker Initiative noted in early February that “Economic damages from climate change have long been underestimated and inconsistently represented in policy and financial decision-making.” In other words, governments, banks and other financial decision-makers are not properly taking into account the accelerating economic impacts of climate change and the potential for sudden and dramatic changes as we hit tipping points.

Until governments and investors take this into account, the report warns, “financial institutions will continue to chronically under-price climate risks, and pension funds and taxpayers will remain dangerously exposed.” And remember, this is only for climate change, never mind all the other ecological changes underway

The broad conclusion of the UNEP report is that these crises “are primarily caused by unsustainable systems of production and consumption”, so the UNEP recommends investing in the transformation of our societies and economies.

An investment now of less than US$10 trillion per year will begin to yield annual benefits by around 2050, UNEP estimates. These overall benefits are expected to “increase to approximately US$20 trillion per year by 2070, and over US$100 trillion per year by 2100, accounting for more than 25 per cent of projected global GDP in 2100.”

Other recent reports add weight to these arguments. They will be the focus of my next column.

© Trevor Hancock, 2026

thancock@uvic.ca

Dr. Trevor Hancock is a retired professor and senior scholar at the                                            University of Victoria’s School of Public Health and Social Policy