Ecological Overshoot: Understanding the Crisis and Dangers of Ecosystem Collapse

Every year, humanity crosses an invisible but critical line – the point at which we consume more natural resources than the Earth can regenerate in an entire year. This phenomenon is called ecological overshoot, and it is not a distant theoretical risk. It is happening right now. In 2025, Earth Overshoot Day fell on July 24, meaning that in less than seven months, we exhausted what the planet could renew in twelve. The consequences – deforestation, collapsing fisheries, rising CO₂ levels, biodiversity loss – are compounding each year. Understanding overshoot, and the real danger of ecosystem collapse it creates, is essential for anyone studying sustainability, economics, or the future of human civilisation.

What is ecological overshoot? 🔗

Ecological overshoot occurs when human demand on natural resources and ecological services exceeds what the Earth’s ecosystems can regenerate in a given period. Think of it like a bank account: the Earth produces a certain amount of “ecological income” each year – through forest regrowth, fish reproduction, carbon absorption, and soil regeneration. Overshoot happens when we withdraw from this account faster than the interest (regeneration) accumulates. Once we exceed that regeneration rate, we begin eating into the principal – our natural capital – and that is a path toward depletion and collapse.

The Global Footprint Network tracks this balance using a metric called the Ecological Footprint, which measures humanity’s demand for biologically productive land and sea area. This is compared against biocapacity – the planet’s ability to regenerate resources and absorb waste. When the Footprint exceeds biocapacity, we are in overshoot. According to the latest data, humanity is currently consuming natural resources roughly 80% faster than the Earth can regenerate them, equivalent to needing about 1.8 Earths to sustain our current way of life.

How overshoot leads to ecosystem collapse 🔗

The danger of overshoot is not just that resources get gradually scarcer. The real risk is collapse – a sudden, dramatic failure of an ecosystem to function, often occurring well before the resource is completely depleted. Ecosystems can absorb a certain level of stress, but once a critical threshold is crossed, they can shift abruptly to a degraded state from which recovery is extremely slow or may never happen.

The Newfoundland cod fishery: a textbook case 🔗

Perhaps the most instructive real-world example of ecological overshoot leading to collapse is the Newfoundland cod fishery collapse of 1992. For nearly 500 years, the Grand Banks off eastern Canada supported one of the world’s most productive fisheries. Cod was the economic and cultural backbone of Newfoundland and Labrador.

Starting in the 1950s, however, the introduction of industrial-scale trawlers and technologies like sonar allowed fleets to harvest cod at unprecedented rates. The catch peaked at around 810,000 metric tons in 1968 – roughly three times the pre-industrial maximum. Despite warning signs, government agencies consistently overestimated stock sizes and set fishing quotas based on economic pressures rather than ecological reality.

By 1992, northern cod stocks had declined by about 93% in just 30 years. The spawning population dropped from approximately 1.6 million tonnes in 1962 to between 72,000 and 110,000 tonnes. The Canadian government was forced to impose a moratorium – the largest industrial closure in Canadian history. Around 30,000 people in Newfoundland lost their jobs, hundreds of coastal communities were devastated, and the province experienced a 10% population decline over the following decade as families left for work elsewhere.

The cod moratorium was expected to last two years. It lasted over 30 years. The ecosystem had fundamentally changed – species that cod once fed on multiplied and began eating juvenile cod, preventing recovery. It was only in 2024 that Canada cautiously reopened a limited commercial cod fishery with drastically reduced quotas. This case demonstrates a critical lesson: collapse can happen rapidly, but recovery takes decades – if it happens at all.

Resource depletion and climate change: the carbon overshoot 🔗

Overshoot is not limited to fisheries or forests. One of its most consequential forms is carbon overshoot – the emission of CO₂ faster than the Earth’s forests, oceans, and soils can absorb it. When absorption capacity is exceeded, CO₂ accumulates in the atmosphere, driving global temperature increases, altered weather patterns, and ocean acidification.

According to the Global Footprint Network’s 2025 analysis, the carbon footprint remains the single largest component of humanity’s total Ecological Footprint. A notable revision in the 2025 data involved a downward adjustment of the ocean’s carbon sequestration capacity, which shifted Earth Overshoot Day eight days earlier compared to the previous year. This means the planet’s ability to absorb our carbon waste is even more limited than previously estimated.

The consequences of carbon overshoot are cascading. Rising temperatures stress terrestrial and marine ecosystems, reduce agricultural yields, accelerate ice melt, and increase the frequency of extreme weather events. Ocean acidification – caused when seawater absorbs excess CO₂ – threatens coral reefs, shellfish, and marine food chains. Each of these impacts, in turn, reduces the planet’s overall biocapacity, creating a feedback loop where overshoot makes future overshoot worse.

The IS-LM model adapted for ecological limits 🔗

To understand how ecological overshoot interacts with economic activity, it helps to look at how ecological economists have adapted traditional macroeconomic models. The IS-LM model is a standard framework in economics that shows how interest rates and output interact to produce equilibrium in both the goods market (the IS curve) and the money market (the LM curve). In conventional economics, the key constraint on growth is “full employment” – the point at which all available labour and capital are being used.

Herman Daly, the pioneering ecological economist and former World Bank senior economist, adapted this model to incorporate a fundamentally different constraint: biocapacity. In Daly’s version, the vertical line that traditionally represents full employment is replaced by a vertical line representing the Earth’s ecological limits – the maximum sustainable throughput of resources and waste absorption the biosphere can handle.

Visualising overshoot in the adapted model 🔗

In Daly’s ecological IS-LM framework, overshoot occurs when the economy’s equilibrium GDP – the point where the IS and LM curves intersect – lies to the right of the vertical biocapacity line. This means the economy is producing and consuming beyond what the Earth’s ecosystems can sustainably support. Unlike the traditional model, where exceeding full employment leads to inflation, exceeding biocapacity leads to environmental degradation, resource depletion, and ultimately ecosystem collapse.

This visual framework makes overshoot intuitive. If the intersection of IS and LM sits beyond the biocapacity boundary, the economy is in ecological deficit – drawing down natural capital rather than living off its annual regeneration. The further the equilibrium sits to the right of that boundary, the greater the overshoot and the higher the risk of collapse.

Policy levers within the model 🔗

The adapted IS-LM model also suggests clear policy responses. Government intervention through taxation on polluting activities – such as carbon taxes, resource extraction levies, or penalties for overharvesting – can shift the IS curve to the left, reducing aggregate demand and pulling economic output back within ecological boundaries. On the other side, conservation and restoration measures – reforestation, marine protected areas, soil rehabilitation – can increase biocapacity, effectively shifting the vertical boundary to the right and creating more ecological room for economic activity.

The model thus frames the policy challenge clearly: either reduce economic throughput (the ecological footprint) or increase the planet’s regenerative capacity (biocapacity), or ideally, do both simultaneously.

Distinguishing growth types in ecological economics 🔗

One of the most important contributions of ecological economics, as articulated in Daly and Farley’s foundational textbook, is the recognition that not all economic growth is the same. Traditional GDP accounting treats every dollar of expenditure identically – whether it comes from building a factory, cleaning up an oil spill, or restoring a wetland. This is a significant blind spot.

Ecological economics insists on distinguishing between expenditures that increase ecological pressure and those that reduce it. Spending on fossil fuel extraction and spending on renewable energy development both add to GDP, but their ecological implications are opposite. Similarly, expenditures directed toward ecological restoration – replanting forests, rehabilitating degraded land, rebuilding fish stocks – represent economic activity that actively expands biocapacity rather than depleting it.

This distinction is not just academic. It has direct policy implications. If a government aims to maintain economic output while bringing the economy back within ecological limits, it needs to actively redirect spending from ecologically destructive activities toward regenerative ones. The adapted IS-LM model supports this: certain types of government expenditure can shift both the IS curve and the biocapacity boundary simultaneously, achieving economic stability without ecological overshoot.

The accumulating ecological debt 🔗

Overshoot is not a one-year problem. Since global ecological overshoot began in the early 1970s, annual deficits have compounded into a massive and growing ecological debt. Each year that Earth Overshoot Day falls before December 31, the deficit for that year adds to the total burden on the planet’s ecosystems. The visible symptoms of this accumulating debt include shrinking forests, degraded soils, depleted fisheries, declining biodiversity, and a destabilised climate.

The phrase often used in this context is telling: overshoot will end – the question is whether it ends by design or by disaster. If humanity proactively reduces its ecological footprint through policy, technology, and behavioural change, we can bring consumption back within the Earth’s regenerative capacity. If we do not, nature will impose limits for us – through resource scarcity, ecosystem collapse, and the cascading social and economic crises that follow.

Pathways to address overshoot 🔗

Addressing ecological overshoot requires action across multiple domains. The Global Footprint Network identifies five key areas where meaningful progress can be made: cities, energy, food, population, and planet. For instance, reducing CO₂ emissions from fossil fuel combustion by 50% alone would move Earth Overshoot Day back by approximately three months. Improving food systems – by reducing waste and shifting diets – offers another major lever. Investing in ecosystem restoration directly increases biocapacity.

The adapted IS-LM framework reinforces these approaches. Policies such as carbon pricing, ecological tax reform, subsidies for regenerative agriculture, and investment in protected areas all represent mechanisms to either shift the IS curve leftward (reducing ecological demand) or push the biocapacity boundary rightward (increasing ecological supply). The challenge, as ecological economists emphasise, is that sustainable scale must be the first priority – before questions of efficient allocation or equitable distribution can be meaningfully addressed.

The Newfoundland cod collapse stands as a powerful reminder. The fishery’s destruction was not caused by a lack of economic activity or technological capability – it was caused by ignoring ecological limits until it was too late. The same logic applies globally. The economic costs of inaction – measured in lost livelihoods, displaced communities, and degraded ecosystems – far exceed the costs of proactive adjustment.

What do you think? If the adapted IS-LM model shows that our current economic output already exceeds ecological limits, should governments prioritise shrinking the ecological footprint through taxes and regulation, or expanding biocapacity through restoration and conservation – or is a combined approach the only realistic path? And what lessons from the Newfoundland cod collapse should inform how we manage other resources at risk of overshoot today?

References

1. https://overshoot.footprintnetwork.org/newsroom/press-release-june-2025-english/
2. https://www.footprintnetwork.org/our-work/earth-overshoot-day/
3. https://www.britannica.com/event/cod-fishery-collapse-of-1992
4. https://www.heritage.nf.ca/articles/economy/moratorium.php
5. https://canadiangeographic.ca/articles/cod-moratorium-how-newfoundlands-cod-industry-disappeared-overnight/
6. https://en.wikipedia.org/wiki/Herman_Daly
7. https://islandpress.org/books/ecological-economics-second-edition
8. https://www.genevaenvironmentnetwork.org/resources/updates/earth-overshoot-day/
9. https://link.springer.com/article/10.1007/s11367-019-01612-y