Magic, Muck and Money

Chapter 4: Magic, Muck and Money
Chapter 4, verse one: The world is a closed system of complexity beyond our grasp and yet so simple in its adherence to balance and continuity as its fundamental principles.
Verse two: Every action has a reaction and so it is with our actions that have environmental impact.Nature will react.
Verse three: Wealth that is not holistic and sustainable, is illusory.

Sustainable_EconomicsAs the environmental impact of our industrial economies has become better known, there has been a growth in political groupings that aim to limit the damage that is being done. Originally the arguments tended to suggest that action should be taken to defend animals, rivers, seas, whales and landscapes for their own sake. Now it is increasingly seen that it is in our own self interest to understand the magic of Nature and to live within her boundaries. It is us who will suffer if whales and jungles are destroyed.

The magic of Nature is balance. The key to balance is reaction, given the constant of change through action. Living requires action, so we must understand the likely reactions if we are to live in harmony with Nature.
It is not that we can be certain of destruction on our current path but rather that we can be certain that we have no idea of the consequences. Looking around at what we can discern from our actions to date, it seems clear that we are capable of creating reaction. It is also increasingly clear that, for all our ubiquitous adaptability and ingenuity, we live within fine tolerances on Nature’s scale. Relatively inconsequential changes in global temperature, from Nature’s point of view, will be devastating for humankind.
On the other hand, it can also be seen that Nature is amply capable of absorbing many of our actions without dramatic consequence. This should not instill us with confidence but should serve to mitigate any desire to panic. It is really important that we change our approach to activities that have an impact on our environment with due consideration. It would be easy to over react, once the magnitude of our divergence is apparent but we must be concerned to take constructive, not precipitous, action.

It is, then, that we must endeavor to make our actions as closely in harmony with Nature as we can achieve and perceive. Our actions of interest in this case are largely within the framework we call our economies — that is to say industry and consumption. It is through our production and consumption of goods, energy and food that we most impact our natural environment.
Even a modest evaluation of our current economies suggests that the pricing mechanisms in use do not reflect the true costs of goods, energy and food because they leave out the long-term impact on Nature and the cost of waste.
A short form of the resulting policy would be that all goods carry an environmental tax that includes waste disposal, or recycling, costs and the cost of greenhouse emissions. Greenhouse emissions can largely be seen in the cost of mitigating their impact and there should be a globally set price per tonne of gas. This greenhouse tax would largelyeffect energy production, and therefore consumption, but would also apply to forest logging and material conversion activities. All products should be assessed for emissions contribution which, however crudely this is done at first, would be a huge step in the right direction.

A waste tax is relatively simple to determine, in that most economies already have a good grasp on the cost of waste disposal and recycling (both of which activities may also attract greenhouse taxes). With regards to durable goods, it would be good to incentivize manufacturers with some sort of change to sales taxes, let’s say a halving, for all products that carry a legally binding parts and labor guarantee that covers the entire intended life of the product. [Of course, it is not difficult to imagine a punitive version of this, as a possible alternative.]

Another factor that affects our environmental impact is the efficiency of our production and distribution and this is where we turn our attention to matters that so dominated the 20th century: the mechanisms of markets and the ownership of the means of production and distribution. Yes, it’s the old chestnuts but I believe fairly easily dispensed with without going back through old arguments.

TPTAF-90Markets work perfectly in perfect marketplaces.
Got that?
Thought that through a little?
Okay, so it stands to reason that we should employ market economics in markets where consumers have real choices and the barriers to entry for new producers are not subject to undue burdens. Frankly, that covers most things and we are quite happy that it should — state control of shoe production has never been a happy story!
But it is not difficult to identify situations where either of the following are true: consumers do not have a real choice or the barriers to entry for new producers are unacceptably high. Electricity and water utilities are easily recognized for both of these attributes.In these cases there is no increased efficiency of their production or distribution in a market environment and so they can be operated by public monopolies in the best interests of the people and responsible for their performance either directly or through the government. The oft used excuse that private ownership and the profit motive increase their efficiency, effectiveness or responsiveness is mere excuse for poor management — some of the worst run enterprises are private, for-profit corporations! It is simply a matter of aligning responsibility and motive and that can as easily be done in a publicly owned initiative partnered with private enterprise as it can anywhere else.

We have not covered production or distribution that is strategic (of which water is also a prime example) because we have assumed that we all understand the logic for public ownership in these cases. We believe that any enterprise controlling strategic resources should be organized at, and responsible to, the lowest level of representative government that its bounds fall within. In some cases that will be different for the same resource than in other cases. In the example of water, it will be bounded by the lowest level that represents the entire catchment basin and, in some cases, that will be transterritorial and in other cases a community.

The point to understand here, is that environmental responsibility and economic management are intertwined. It is vital that we grasp this nettle and accept that the people have a right to interfere in the mechanisms of economics and business to promote sustainability and survival.


Next Principle: Yes, we can


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