Green Economics and how it might work

In times of the global economic recession and ecological crisis, it is obvious a radical response is needed. World-renowned economist Herman Daly maintains the future of human civilisation is dependent on a new economic model, based on a dynamic model—known as the steady state economy—preserving the environment we are all dependent upon.

There needs to be a shift away from the current paradigm of the growth economy towards a system that emphasises conserving natural capital and views the economy as a subset of the environment.
Steady state economics argues that different forms of capital are complementary and cannot be substituted. They have to be used in fixed proportions. Adding one cannot make up for having less of another. The ever-decreasing supply of natural capital cannot be replaced by adding more physical capital (which is made from natural capital in the first place).

The basic premise behind the steady-state economy is to maintain constant stocks of wealth and people at levels that will suffice for a long and good life. The throughput by which these stocks are maintained should be at a low level and within the regenerative and absorption capacities of the ecosystem. Greenhouse gas emissions should only occur if the planet is able to absorb these gases back into natural sinks, as opposed to being stored into the Earth’s atmosphere. The system is therefore sustainable and can continue indefinitely. The goal of progress in a steady-state economy is not to get bigger but to get better. Rather than increase monetary wealth for a few, it increases the well-being of the many.

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Another argument of those who oppose the steady-state economy and think that the current system is the answer is that of technology being able to solve our problems. We shouldn’t worry about peak oil, as electric cars will become cheap and viable for everybody. However, there are a couple of issues here. There is a limited amount of platinum available in the world. This is an important component for the vehicle’s battery. There is not enough platinum to produce enough cars to replace the current petroleum-based vehicle fleet on the planet.

This blind faith that technology will solve all our problems is just that, blind faith. These solutions will be far more expensive than the preventive measures available. These solutions may in fact cause more problems rather than solving the current environment problems.

Scoop