The Economics of Mitigating Climate Change
Frequent commenter Gary Tulie sent me this Wiki-article describing the 700-page “Stern Report” which, published in 2006, lays out a comprehensive set of economics regarding climate change mitigation.
From my reading of the article (though not the complete report), my first thought is the viewpoints of people like Jeremy Rifkin. In his book The Third Industrial Revolution, he makes a fairly compelling case that the development of cleantech can represent not a cost to society, but a platform on which enormous prosperity can be built in the 21st Century.
Of course, not everyone agrees. In fact, people like 350.org’s Bill McKibben and Nate Hagens (contributor to my second book, Is Renewable Really Doable?) say the precise opposite, i.e., that “the party is over” for economic growth, regardless of what we think might drive it.
But my point is that there is an enormous amount of diversity in opinion regarding the economic impact of cleantech, and there is some legitimacy to the idea that this is a boon rather than a cost.
Here is an interesting question – Is economic growth necessary for an improved standard of living?
Are the two even closely related?
Take for example increased spending on infrastructure to repair damage from a natural disaster – by some measures, this will look like economic growth and can provide a boost to GDP, however had a little more been spent on designing the existing infrastructure to “ride through” a disaster with minimal damage less money would be spent to fix infrastructure after the disaster, less people would suffer, and the whole community would greatly benefit through retaining the community infrastructure with only minor damage.
Take another example – suppose two washing machines are sold
Machine 1
Runs reliably for 2000 wash cycles using very little power, very little water, and delivering an excellent wash every time. Design allows easy repair or replacement of key components and easy recycling at end of life Cost $800.
Machine 2
Designed as a disposable item to run for 300 wash cycles after which it is not worth repairing as all the other components are ready to fail. Uses twice as much electricity and water as well as 50% more detergent than machine 1, and is not designed to ease recycling. Cost $400.
In the time machine 1 lasts, you would have replaced machine 2 six times, spent twice as much on electricity and water, and 50% more on detergent and had considerably more inconvenience through machine failure. Machine 2 also places far higher demands on natural capital i.e. the environment
In this case, a society where everyone buys machine 2 would show higher economic activity related to laundry equipment, but the customer would have an inferior product with far higher cost of ownership and consequently would be less well off. Business – washing machine manufacturers and shops, electricity, water, and detergent suppliers and the government through sales tax would be winners at the cost of the economic well being of the general public.
I for one would prefer to live in a society where machine 1 is typically selected in preference to machine 2 even if the country’s GDP appears a little lower as a result.
This is excellent, IMO. I see tons of flaws in calculating GDP, and this illustrates a good one.
I’m including a link to an article about extracting CO2 from sea water. It should be noted that doing so increases the capacity of sea water to absorb more CO2 from the air thereby reducing atmospheric CO2 which would, for obvious reasons, be beneficial. However, the primary objective in extracting CO2 from sea water would be to use the carbon to manufacture hydrocarbon fuels, as indicated in the article. Here is the link:
http://bravenewclimate.com/2013/01/16/zero-emission-synfuel-from-seawater/
I think the climate change can accelerate the introduction of the society in the Third Industrial Revolution as explained by Jeremy Rifkin in his book http://sustainableenergyblog.net/third-industrial-revolution-started/