The circular bioeconomy in the face of the growing risk of forest fires

Article published in El Periódico on 30 July 2026.

What is needed is a circular bioeconomy that attracts investment, employment and innovation to the rural world so that it can realise its full potential in generating well-being and prosperity.

While New York, the world’s financial centre, sees its skies turn grey from the smoke of the wildfires devastating the forests of Canada, in Spain more than 153,000 hectares have burned. That is six times greater than in the same period of the previous year, which had been the worst year in three decades in both Spain and Europe as a whole.

It certainly stands as a metaphor that the world’s financial centre should see the true colour of money mirrored in its skies. In a world where the economy has surpassed the limits of the Earth’s resilience, the so-called negative externalities of our economy – climate change, biodiversity loss, landscape degradation – is fuelling ever more intense flames, and the smoke they generate is becoming visible in places where they are causing the greatest discomfort. It is becoming increasingly difficult to ignore the obvious. Economic externalities are giving rise to environmental risks such as drought, flooding, forest fires and heatwaves, and are rebounding like a boomerang in the form of rising economic losses. The economy is boiling itself away on an ever higher flame. As I noted at the Mediterranean Economic and Social Forum, the worldwide losses of insurers from climate change in the past five years are double what they were in the previous ten years. In Europe, economic losses from extreme events like flooding, fires and droughts in the past five decades have grown at a pace of 10 billion euros every twelve years.

Economic externalities are giving rise to environmental risks which, in turn, are rebounding like a boomerang in the form of rising economic losses

These extreme events and their economic impact are the symptoms, akin to how fever occurs when the body fights an illness, of an economic system that is undergoing a multi-organ crisis. This crisis is the result of following a diet based on fossil fuels for more than a century. Fossil fuel resources are extracted, do not regenerate, and our economy has extrapolated this extractive relationship to everything around it, including the bedrock infrastructure that regulates our planet and hence our economy as well: nature. Fossil fuel resources have not only been our source of energy, but have permeated every sector of the economy: agriculture (e.g. fertilisers and pesticides), fashion (polyester), chemicals and pharmaceuticals, building (concrete and steel).

Read more: Transforming our economy around nature | Lombard Odier

As a non-renewable resource that cannot be regenerated, it has not only changed the climate of our planet, but it has also untethered our economy from the Earth’s ecology. Economy and ecology are words that come from the same Greek word "oikos", which means our common home, our shared life space. Ecology (from the Greek "logos") means to "understand" our common home. Economy (from the Greek "nomos") means to manage our common home. We cannot manage what we do not understand. The fossil fuel era has uncoupled us from the biological web that gives the Earth its purpose: nature.

We cannot modify the territory at scale without modifying the economic model that created it

Back to the problem of forest fires. Obviously, as they are a symptom of a "sick" economy, the solution cannot come by way of investing in means of extinction, which only addresses the symptoms, not the causes. Nor will the solution come by way of preventive measures alone. The problem goes deeper, for we cannot modify the territory at scale without modifying the economic model that created it. It is important to bear in mind that the fossil fuel-based economic system has brought about two major structural transformations that have led us to today’s extreme situation:

Changes in the physics of the atmosphere: we must be aware that, for every one degree centigrade rise in temperature, the atmosphere contains 7% more water, due to the laws of thermodynamics. This means that, in dry seasons, the atmosphere is going to absorb more water from our soil and landscapes, causing more frequent and more intense droughts and forest fires. In addition, in rainy seasons, the atmosphere is going to return more water in the form of torrential rain. Droughts, fires and flooding, paradoxically, are different aspects of the same problem.

Socio-ecological changes in our rural and urban landscapes too. The fossil-fuel economy has produced ever more simplified and degraded landscapes that, accordingly, are less resilient to climate change, at a time when extreme events are playing a decisive role. More simplified because in many parts of the world we have replaced natural ecosystems of high biodiversity (biodiversity=resilience) with large-scale monocultures that largely depend on synthetic inputs like fertilisers and pesticides that degrade soil and erode biodiversity, which safeguard the resilience of our landscapes, as healthy soils store much more water in a context of drought and flooding. Also, in other areas of the world, such as in many regions of Europe, simplification has been accompanied by an exodus from the rural world and an unprecedented concentration in urban areas, which has led to an abandonment of the rural economy and a widespread loss of our ties to nature and its biological and ecological cycles. What were once mosaic landscapes in which forests, meadows, livestock and farmland coexisted, have become landscapes with an unbroken continuity of biomass that is entirely unmanaged. This simplification between the urban and rural worlds has created urban-rural interfaces that are harder to manage (e.g. residential developments) in a context of climate emergency.

Read more: Investing in global system changes | Lombard Odier

At this point, we should recall the words of Albert Einstein: "We cannot solve our problems by using the same kind of thinking we used when we created them." And that is precisely what we need now: a new mental framework as the basis of a new economic paradigm.

An economy that is aligned with the ecology of the Earth, a bioeconomy: bio means life, where life, and not fossil fuel resources, is the driving force and raison d’être of our economy

A paradigm where economic prosperity takes place within the ecological limits of our planet. An economy that is aligned with the ecology of the Earth, a bioeconomy: bio means life, where life, and not fossil-fuel resources, is the driving force and raison d’être of our economy.

A circular bioeconomy that attracts investment, employment and innovation towards the rural world so that it can fully realise its potential to generate well-being and prosperity, while resolving the structural causes – climate change and degradation of the socio-economic systems of our rural areas – that underlie the problem of fires and other environmental risks. This paradigm shift requires overcoming the major dichotomies of the industrial age: ecology and economy, rural and urban world, progress and nature.