●Global Environmental Issues and the Economy: Three Key Relationships

●Global Environmental Issues and the Economy: Three Key Relationships The primary causes of global environmental issues include population growth, prosperity in the North and poverty in the South, expanding financial markets, the evolution of material civilization, national borders, the capitalist system, and international and domestic laws. As a result, phenomena such as desertification, global warming, the depletion of natural resources , marine pollution, air, water, and soil pollution, ozone layer depletion, and extreme weather events are occurring. <Global Environment → Economy> Such global environmental issues naturally cast a significant shadow over the economy. For example, considering just one aspect—extreme weather— whether it be a cold summer or a heat wave, they cause significant damage to crop yields and trigger a surge in grain prices. This is a major economic issue, and it exacerbates the problem even further in a situation like the present, where grain production is concentrated in North America. <Economy → Global Environment> However, the relationship between the global environment and the economy is not that simple. Just as environmental issues have a major impact on the economy, the economy, in turn, exerts a significant influence on the global environment. For instance, the exploitation of natural resources in the Global South by the Global North is striking. The wealthy nations of the North continue to use vast amounts of capital to purchase food—a bounty from the land and oceans—as well as forest resources, oil, and natural gas from the nations of the South. <Economic Growth Has Its Limits> It could be described as a chicken-and-egg situation—which came first—but the two-way flow, where environmental issues affect the economy and the economy affects environmental issues, has spiraled upward. At this stage, it has reached a point where future economic growth is limited without consideration for the global environment. For this reason, the phrase “how to achieve sustainable growth” has taken on great significance. As a useful strategy for achieving sustainable growth, for example, similar to the grain production mentioned earlier, there is a method from a global perspective that avoids fixing the world’s food production in specific regions. This means respecting the uniqueness of each region and increasing food self-sufficiency. In addition to this, several strategies for sustainable growth have been , but local currencies are considered a highly effective method for breaking the current deadlock. It is generally said that “when a single currency circulates, the regional economies that make up the economic sphere tend to shrink.” The current financial landscape is described as a unipolar dominance by the dollar, and the result is an extreme concentration of wealth. Prosperity in the North. The North-South divide—with the North’s abundance and the South’s poverty—has long been a concern, yet there is no prospect of improvement; on the contrary, the gap seems to be widening. Since the dollar accounts for 65% of foreign exchange reserves, 40% of investment currencies, 42% of currencies traded in the foreign exchange market, and 48% of global trade, calling it a “monopoly” might be an exaggeration. However, since the are dispersed, so it can still be described as a dollar-based system. Here, let’s consider the implications of this single currency and regional contraction. To simplify the explanation, let’s assume there are two countries, Country A and Country B. Country A produces pumpkins, and Country B consumes them. Furthermore, Country A produces nothing other than pumpkins, and all consumption depends on Country B (see figure above). Harvest time has arrived. Country A harvests 100 kg of pumpkins, and it is generally said that “when the currency in circulation is a single one, the regional economies that make up the economic zone tend to shrink.” The current financial situation is often described as a dollar-dominated monopoly, and has resulted in extreme concentration of wealth. The North-South divide— with the North being prosperous and the South impoverished—has long been an issue, yet there is no prospect of improvement; on the contrary, the disparity appears to be widening. The dollar accounts for 65% of foreign exchange reserves, 40% of investment currencies, 42% of currencies traded in the foreign exchange market, , so calling it a “monopoly” might be an exaggeration. However, since the shares of currencies other than the dollar are dispersed, we can still say it is a dollar-based system. Here, let’s consider the implications of this single currency and regional stagnation. To simplify the explanation, let’s assume there are two countries, Country A and Country B. Country A produces pumpkins, while Country B consumes them. Furthermore, Country A produces nothing other than pumpkins, and all consumption in Country A depends entirely on Country B (see figure above). Harvest time has arrived. Country A harvested 100 kg of pumpkins. 100 kg of pumpkins is worth 1 million yen. Country A exported the pumpkins to Country B and received 1 million yen. However, this 1 million yen is used to cover the costs of cultivating pumpkins for consumption over the next year and to support the livelihoods of the people in Country A. Under these conditions, this 1 million yen is entirely used to import consumer goods from Country B, and the full amount is paid to Country A as payment for the purchase of consumer goods. Since this example is based on the condition that all consumption is borne by Country B, the reality may not be quite so extreme, but it is generally true