The new economy?

We apologise if climate change has monopolized our blog quite a bit. It is inevitable because everything we do is linked with how it affects the climate, directly or indirectly. Every task draws up on energy which puffs out carbon into the atmosphere which traps heat and in turn warms the globe. If we are to offset this, we need to spend and since it’s all about cost, it’s time to update the economics of climate change.

That’s what “The Economics of 350,” a new study put out by Economics for Equity and the Environment, a group of climate economists put together by Ecotrust, suggests.

350 ppm is the ambitious target which we have already crossed over but we can stabilize at that if we take certain steps and this can be done at a cost of between 1% and 3% of gross domestic product, says the study.

As the group notes, the unprecedented challenge of global warming is a ‘civilizational challenge’.

The group proposes four organizing principles for a new, pro-environmental economics. These cover, Equal rights to health and environment; Investment, opportunity, and stewardship (as this is also about investment in natural and human assets); Complexity, uncertainty, and the need for precaution; the good life and the limits of efficiency.

‘With well-designed programs and regulations, there is no trade-off between environmental and economic well-being.’ This basic finding needs to be elaborated and widely publicized. Investment should be understood in long-range, socially oriented terms (think of children's education, not market speculation), they say.

‘Our task is to understand the linkages between natural and economic systems, which exhibit complex threshold effects, dangers of irreversible damages, and interactions between global changes and place-based, location-specific effects

‘The theory of public goods is again important to rebuild, since so many things that matter are not individual commodities. It is absurd to try to attach monetary valuations to priceless values, or to view all the multiple facets of life through the distorting lens of the market.’

E3 is seeking to organize economists to engage and work with environmental groups. Towards realizing the objective of building a new economic order.