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The Greenback Effect & Letting the Market Take Care of Global Warming
Posted By G Living Staff Monkies On January 14, 2009 @ 1:37 am In Green Report / Media | 5 Comments
Growing up in a capitalist society, it’s hard to understand that some countries don’t rely on markets to make economic decisions.The Soviet Union’s collapse was due in a large part to relying on the government to make all the economic decisions. Well that and the fact that the government owned everything, basically making slaves of their population. But giving all the keys to the corporations isn’t the answer either, which has been made very clear lately.
Unfortunately, the global market has brought global problems, the most significant of which is global warming. A big piece of this problem is that no one really pays the true cost of the goods that we buy. Whether through subsidies or sweatshops, global prices are kept low and the companies that peddle greenhouse-emitting fuels reap some of the greatest rewards.
So, what can we do to make the market work better in terms of global warming? Bill McKibben of Mother Jones has an interesting idea: make clear the true cost of carbon emissions and the market will take care of the rest. In a recent article, he states: “Markets are impotent in fighting the greatest challenge our planet has ever faced because we’ve given them absolutely nothing to work with. They exist in childlike innocence about the crisis because carbon carries no required cost.”
The effort here is two-pronged. First, make the environmental catastrophe awaiting clear and easy to understand. Second, put in place the regulatory measures that sway the market away from the emission industry and towards new, cleaner energies.
On the first prong, we have gone far enough. When even Dubya admits that global warming is a problem, we can rest assured that the message has taken effect. On the second prong, ideas like progressive caps, dirty-fuel taxes and pollution permits are all good ideas to start with. These measures help clarify the true cost of coal, oil and nuclear by charging on the front end for the damage that looms on the backend after production starts.
And for you Adam Smith, Milton Friedman types who oppose market tinkering, you should ask yourself why big oil, big coal, and big nuclear should benefit from market manipulation in the form of huge tax breaks.
Of course there will be unintended consequences, like companies passing off higher costs to consumers, but I’m convinced that if we use a bit of our old-fashioned innovative thinking, we can solve that problem too.
America must lead the way on this issue or face being left behind in the new, global, clean-energy economy.
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