I’ve wandered off the reservation again this morning and am strolling around Carbon E Coyote’s turf but I hope he doesn’t mind too much because as we Australians await the Prime Minister’s “Carbon Tax” announcement tomorrow I thought it is worth a quick post and link that is related to this issue.
It is important to note I believe we should do something about the amount of CO2 that is going into the atmosphere. 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 future generations behind us at a massive disadvantage.
So for me a price on carbon, with the requisite industry and consumer adjustment packages , is way of ensuring we change the nature of our consumption of non-renewable resources. It should also asssist 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 the planet seems to be warming). In addition as countries like China and India move toward levels of consumption of natural resources that are trending toward developed world rates we’ll find it difficult to allocate these scarce resources – particularly to feed ourselves.
We need a better way to allocate resources, both energy and food, and crucially a new government body to fund “green” businesses, to ensure the future for my children, your children and our grand children.
There is no avoiding the fact that there is going to be a cost of adjustment but the cost now, will be less than the rampant inflation and costs associated with the future economy if we 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. Just think about what an extra 1% or more in interest rate hikes would cost the economy. Equally imagine the damage that $2+ per litre petrol would do. These are “hidden’ costs and risks in our future but they are costs nonetheless and can not be ignored when thinking about the issues.
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.
Jeremy Granthum recently published an essay on the very topic of “peak” resource availability and I would suggest that you have a read and form your own view but here is an excerpt from the introduction, (my bolding)
The purpose of this… to recognize that we now live in a different, more constrained, world in which prices of raw materials will rise and shortages will be common…
Accelerated demand from developing countries, especially China, has caused an unprecedented shift in the price structure of resources: after 100 hundred years or more of price declines, they are now rising, and in the last 8 years have undone, remarkably, the effects of the last 100-year decline! Statistically, also, the level of price rises makes it extremely unlikely that the old trend is still in place. If I am right, we are now entering a period in which, like it or not, we must finally follow President Carter’s advice to develop a thoughtful energy policy and give up our carefree and careless ways with resources.
The quicker we do this, the lower the cost will be. Any improvement at all in lifestyle for our grandchildren will take much more thoughtful behavior from political leaders and more restraint from everyone. Rapid growth is not ours by divine right; it is not even mathematically possible over a sustained period. Our goal should be to get everyone out of abject poverty, even if it necessitates some income redistribution. Because we have way overstepped sustainable levels, the greatest challenge will be in redesigning lifestyles to emphasize quality of life while quantitatively reducing our demand levels.
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. 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 for the sustainability of the globe’s ecology in the future. 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.