By Lester R. Brown
When Nicholas Stern, former chief economist at the World Bank, released his ground-breaking study in late 2006 on the future costs of climate change, he talked about a massive market failure. He was referring to the failure of the market to incorporate the climate change costs of burning fossil fuels. The costs, he said, would be measured in the trillions of dollars. The difference between the market prices for fossil fuels and the prices that also incorporate their environmental costs to society are huge.
The roots of our current dilemma lie in the enormous growth of the human enterprise over the last century. Since 1900, the world economy has expanded 20-fold and world population has increased fourfold. Although there were places in 1900 where local demand exceeded the capacity of natural systems, this was not a global issue. There was some deforestation, but overpumping of water was virtually unheard of, overfishing was rare, and carbon emissions were so low that there was no serious effect on climate. The indirect costs of these early excesses were negligible.
Now with the economy as large as it is, the indirect costs of burning coal–the costs of air pollution, acid rain, devastated ecosystems, and climate change–can exceed the direct costs, those of mining the coal and transporting it to the power plant. As a result of neglecting to account for these indirect costs, the market is undervaluing many goods and services, creating economic distortions.
By Lester R. Brown
One of the questions I am frequently asked when I am speaking in various countries is, given the environmental problems that the world is facing, can we make it? That is, can we avoid economic decline and the collapse of civilization? My answer is always the same: it depends on you and me, on what you and I do to reverse these trends. It means becoming politically active. Saving our civilization is not a spectator sport.
We have moved into this new world so fast that we have not yet fully grasped the meaning of what is happening. Traditionally, concern for our children has translated into getting them the best health care and education possible. But if we do not act quickly to reverse the earth’s environmental deterioration, eradicate poverty, and stabilize population, their world will decline economically and disintegrate politically.
The two overriding policy challenges are to restructure taxes and reorder fiscal priorities. Saving civilization means restructuring taxes to get the market to tell the ecological truth. And it means reordering fiscal priorities to get the resources needed for Plan B. Write, call, or e-mail your elected representative about the need for tax restructuring to create an honest market. Remind him or her that corporations that left costs off the books appeared to prosper in the short run, only to collapse in the long run.
Or better yet, gather some like-minded friends together to meet with your elected representatives to discuss why we need to raise environmental taxes and reduce income taxes. Before the meeting, draft a brief statement of your collective concerns and the policy initiatives needed. Feel free to download the information on tax restructuring in Chapter 13 of Plan B 3.0: Mobilizing to Save Civilization from the Earth Policy Institute Web site to use in these efforts.
By Lester R. Brown
