The Economy and the Environment

As we Australians await the Prime Minister’s “Carbon Tax” announcement I thought it is worth a quick post and link that is related to this issue. 

It is important to note that I believe we should do something about the amount of CO2 that is going into the atmosphere but I believe this not just because of global warming but also, primarily in fact, I believe that we are using the planets resources at a rate that is unsustainable and leaves the generations behind us at a massive disadvantage.

So for me a price on carbon, with the requisite industry and consumer adjustment packages a must, is way of ensuring we change the nature of our consumption of non-renewable resources of the planet and the development of new industries and approaches that will make living on this planet more sustainable for all humans not just the developed world rich.

Indeed I posit that perhaps the carbon Tax for all the political kerfuffle that is going on at the moment is a natural economic evolution of what needs to be done in the economy given the science suggests that the planet seems to be warming but that we know as China and India, in particular, move toward levels of consumption of minerals and agriculture that are trending toward developed world rates we’ll just find it difficult to allocate the scarce resources but particularly to feed ourselves.

We can also guarantee that at some point, perhaps not my lifetime but probably my kids, the nature of humanity will lead to massive armed conflict over scarce resources. History tells us this is pretty much guaranteed.

We need a better way to allocate resources, both energy and food, and perhaps a carbon tax, and crucially the new government body to fund new “green” businesses is critical to ensuring the future for my children, your children and grand children.

There is going to be a cost of the adjustment but the cost now will be less than the rampant inflation and costs associated with the future economy if we as a species don’t make our consumption of resources less intensive. Pre GFC commodity prices were a window of the future of inflation – remember Australian CPI inflation hit 5% in 2008 and the RBA was rabidly worried about reining it in – it’s why they are still so nervous now.

For me it is not just about global warming and sea level rises and it’s not just about carbon and carbon dioxide in the atmosphere. I’m less interested in the debate about what the science reveals because we can all see for ourselves the rate of consumption of non renewable resources and the need to make agriculture more productive. And I don’t believe it’s ok for me to consume whatever I want and just assume that technological change at some nebulous point in the future will make everything ok for future generations.

So I hope the carbon tax debate is the catalyst for a broader debate about the interaction of the economy and the globes ecology – and taking steps to make the human race sustainable. because if we don’t I’m fairly sure mother nature and natural selection will.

Here is 17 minutes and 11 seconds of a must view video that I first saw on naked capitalism. Yves wrote of the video

 William Rees is one of the pioneers of ecological economics and is the originator and co-developer of ‘ecological footprint analysis’. This video contains some basic facts about current consumption levels in advanced economies that are attention-grabbing. I’d normally say “Enjoy” but this is not that sort of video.”

As John Mauldin would say you may “need an adult beverage when you watch this.

Australian’s are being asked to take some pain now essentially for the sustainability of the globes ecology. It’s now time for our politicians to spend as much time convincing their global peers that their populations too should think about the future of the planet. Otherwise we may injure ourselves for not much gain for the planet or our kids.

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  1. Weekend Reading – Stuff we found interesting this week | Lighthouse Securities - July 9, 2011

    […] On Dangerous Disconnect between Economics and Ecology. I’ve also done a post on the Economy and the Environment this morning as […]

  2. Carbon Pricing and Uncertainty | Lighthouse Securities - July 11, 2011

    […] interested in the political debate that is not our goal or role, our thoughts were summarised in Saturday’s blog,  but we are interested in what the economic impact will be know that everyone knows the cost and […]

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