Enlightened Economics

Economics for an Enlightened Age

Archive for the ‘Environment’ Category

• Weekend read: The trouble with growth

Posted by Ron Robins on April 12, 2015

“A theme of particular interest is understanding what might be possible in advanced economies in the absence of economic growth and reductions in throughput.

Would these economies collapse without growth? Would mass unemployment result? Could the existing institutions — in particular, financial institutions — survive without growth, and if not, what sort of changes might be required? What would be the implications for economic growth of strict limits on throughput?”
Weekend read: The trouble with growth, by Peter A. Victor and Tim Jackson, April 11, 2015, GreenBiz, U.S.A.

Commentary: Ron Robins
There’s no doubt — barring the economic extraction of resources from other heavenly bodies — that Earth’s resources are limited and that for economic growth to continue indefinitely is impossible unless Earth’s resources are used far more efficiently. If we’re to avoid wars and famines where countries and peoples plunder each others resources, there has to be a marked change in consumer behavior. How can this happen? Will scare stories and killer climate events cause the change in consciousness? Perhaps so, but a more humane way is best.

And the nature of that humane response is for governments, educational institutions, and companies encourage changes in individual and collective consciousness the like of which I’ve written about in many of my posts that include: The Missing Ingredient In Economics — Consciousness!Cultural Creatives to Dominate in the Age of Enlightened Economics; and ‘Voluntary Simplicity’ Brings Higher Consciousness into Economics.

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Posted in Consciousness/Psychology, Economics, Environment, GDP Alternatives, News, Commentary, Spiritual | Tagged: , , , , , | 1 Comment »

• Jeffrey Sachs: ‘By separating nature from economics, we have walked blindly into tragedy’

Posted by Ron Robins on March 10, 2015

“We need a new way of thinking, one that tightly links the human-made world of economics and politics with the natural world of climate and biodiversity and with the designed world of 21st century technology. Consider my own home field of study, economics. Sometime in the 19th century, economics largely dropped its traditional attention to land, water and food, as industry replaced agriculture as the leading economic sector. Economists decided, by and large, that they could ignore nature – take it “as given” – and instead focus on market-based finance, saving, and business investment. Mainstream economists derided the claims of “limits to growth.”
— 
‘By separating nature from economics, we have walked blindly into tragedy’, by Jeffrey Sachs, March 10, 2015, The Guardian, U.K.

Commentary: Ron Robins
One main point from the above is how to economically and financially account for natural resources which have been taken “as given.” I read sometime ago of a libertarian economist who advocated that all such natural resources should go back into private hands and then markets would price them appropriately with most owners pricing in the cost of resource depletion, replenishment and so forth. I rather like this concept but it’s probably completely impractical and might well be unfair for most of the population. (Think the Russian “oligarchs!”)

What I would propose, as mentioned in my post of February 28, 2015, is the creation in each country of a sovereign wealth fund that would not only own stocks, bonds, etc., but also all those natural resources that are presently owned by governments. The fund would have a major goal of long-term resource guardianship and management. The fund would then allow bids from private or other public bodies for the use of those resources, and prices would be struck that might approximate a genuine market rate that also allows for the real costing of resource depletion and environmental degradation.

Many governments today already hold or auction off various natural assets or resources — from water to wireless frequencies — but too often without regard to their long-term economic and financial consequences. Also, the proceeds usually only go to help offset the government’s current year cash outlays. From the perspective of  fully accounting for the costs of resource depletion and degradation, this is wholly unsatisfactory.

Hence, I add the idea to my prior post that the sovereign wealth fund described there should now also hold the nation’s public resource assets. This would add to the financial ability of the fund to support the future incomes of the poor (as I wrote in my commentary for that post).

Thus, this proposal might solve both the issues of pricing in the full costing of resource depletion and degradation from an environmental/climate change perspective while eventually narrowing the wealth gap between the rich and the poor. Call this enlightened economics.

Posted in Economics, Environment, News, Commentary | Tagged: , , , , , , , , | 1 Comment »

• Stronger Environmental Policies Do Not Hurt Economic Growth

Posted by Ron Robins on January 16, 2015

“Studies of individual environmental laws, such as the Clean Air Act, have found that they have little impact on employment and productivity… Now, there is hard data showing that more, and more stringent environmental policies do not harm economic growth.

That’s the finding of researchers at the Organisation for Economic Co-operation and Development who have compiled the first comprehensive set of data on environmental strictness and its effect on productivity. The figures cover 24 OECD countries from 1990 to 2012, and draw on the ORBIS database of information on 44 million companies. The report’s conclusion contradicts what governments and companies often believe: that green regulations may be justified in the long run, but that they come with immediate, substantial economic costs. One interesting point: stricter environmental policies may encourage businesses to invest more in efficiencies and innovations than they would have otherwise.”
— John Howell for 3BL Media.

Commentary: Ron Robins
That such a respected economic body like the OECD finds that environmental laws do not hurt economic growth should be become a major plank in the platform of political parties everywhere. That way the idea can be embedded in public consciousness and spur governments and businesses to not be afraid of environmental regulations.

However, I believe a superior way to accomplish this goal would be based on market-based pricing mechanisms that allow for full product costing that includes societal health and environmental costs. I would propose a scaling up over time of the inclusion of such costs and that all trade agreements be amended to account for them. Presently, this is probably impractical, but from a free market perspective might be preferable to government imposed regulations and laws. Such a market-based mechanism might also be less expensive to administer. Just a hunch though…

Posted in Economics, Environment, News, Commentary | Tagged: , , , | Leave a Comment »

 
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