Sunday, June 18, 2006

Global warming solution is to free the market.

I believe the solution to global warming is going to be a free-market based one, which is why I am linking to this article. But first I want to tell you what I think.

Just as democracy operates best with an informed populace, so the free-market operates best with fully informed consumers. However we don't have a free market, and symptomatic of this is the unprecedented global warming that we are experiencing. The carbon cycle is out of kilter, with a build-up in the atmosphere trapping more heat than is reflected back into space, slowly heating the globe.

The reason why carbon is bottlenecking in the atmosphere is that we pump it up there, as a gasseous by-product of anciently sunk carbon dioxide, the fossil fuel energy we now use. Consumers have imperfect information about this, and it's effects when they fill up at the pump. They don't know that it was sunk for a good reason. Not because the knowledge is not there, it's been out there since 1988, but because it has been distorted by the purveyors of fossil fuels.

This hasn't been helped by our free-market economics theories and practices that seek to increase their margins by externalising costs of goods: :::[Planet Ark]

OSLO - The world must lay to rest a "myth" that protecting the environment harms economic growth, the new head of the UN Environment Programme said on Thursday.

Achim Steiner, a 45-year-old German, said he would seek to involve consumers, governments, businesses and activists in developing new economic mechanisms to protect the planet from threats ranging from climate change to pollution.

"Care for the environment is often portrayed as detrimental to economic growth," he told on his first day as head of the United Nations' top environment body.

"We hope to lay that myth to rest in the 21st century," he said by telephone from UNEP headquarters in Nairobi, setting out priorities for a four-year term.

Most conventional economic theory places no value on natural phenomena such as the coastline protection given by coral reefs or forests' role in absorbing heat-trapping carbon dioxide.

Steiner said a shift was needed to recognise the "enormous wealth of nature's services" underpinning all life on earth. In turn, that would show that environmental protection is a condition for economies to survive and thrive in the long term.

"We have to get environmental concerns into the mainstream of economics... to include what we are consuming and destroying," he said.

The article goes on to talk about how carbon trading places commercial activity in an economic system that recognises the fine business sense in keeping our common natural capital in good working order. If vigorous free market competition was happening within this framework then we would have the formula for species longevity. If one of us cuts corners to accumulate wealth, sell of a bit of the proverbial farm and the rest of us down the river, we are all ultimately poorer for it. We need economic thinking that has us as stewards of the planet, rather than masters of it. The reward is that we become masters of our destiny. The planet is like that.

Learn more about carbon trading: :::[Carbon Planet]

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1 comment:

Anonymous said...

I could not agree with you more. A Green and ecologically sustainable economy which operates around a free global market is achievable simply through the realisation of the importance of 'natural capital' in our economies and our dependence on it, and the reflection of that in our businesses accounting records and our governments' policies. By building an efficient and green capitalist economy we can succeed in delivering genuine ecological sustainability, and economic prosperity.