Breaking the Bedplate of Economics

(September 9th, 2009)
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Shanghai skyline
Creative Commons License photo credit: johnkoetsier

As the Climate Conference of Copenhagen keeps approaching the conversation on who should do what and who pay for it all heats up as well. The argument coming from many of the developing countries (and up till recently the US and few other industrialized countries as well) is that tackling climate change is something they cannot afford. Furthermore, it has been stated by for example China that since a lot of this warming has been caused by the emissions made by developed countries historically they are also the ones who should fix it. The argument continues by saying that developing countries can take part, yet their primary concern lies in reaching same prosperity levels that people have accustomed  in the developed countries.

Nobody seems to really disagree about the overall importance of slowing down climate change. It just seems to be very much a question of financial resources, and as always, it seems to be the economy that has the upper hand over environment. Developing countries are not wrong either by stating the historical facts that point responsibility towards the industrialised countries. Something has already been to that, for example the EU set out a 15 bn € climate aid plan. It is very much under what the developing countries hoped for, but still a start (even though one could question some developing countries ability to make sure that money goes into good use).

Unfortunately, climate change is not a question on who is right and who is wrong. It is bound to take place no matter whose fault it turns out to be. Excuses won’t do any good either. The statement on “cannot afford” does not hold much water either, not on the long run. The view over economy prevailing over environment is even more ridiculous. One has to remember, that climate change as such has nothing to do with people’s right to get rich, even though indirectly it might seem so on short term. Curiously enough, if the climate changes ‘sufficiently’ and environmental destruction keeps on continuing, it might make the question on who is rich and who is not even quite irrelevant.

How so? For one thing, putting economics on one side and environment on the other is a very outdated way to view the world. Tackling climate change comes with a cost, but according to the Stern review and others doing nothing is going to be even more expensive. Therefore, the latter option is simply bad business and bad for the development. Furthermore, the longer one waits the more one pays. Better still, wait long enough and there might be even no price to be paid anymore, since there is nothing or very little that can be done in the first place.

Second, as Stern and comp.  show with their report, economics and environment are not separated from each others, they are very much interconnected. Moreover, uncontrary to the understanding of many, it is the economics that is the luxury good in the world of environment, not vice versa. Our, and everybody’s economy is very much built on the proper working of the environment: to be able to work, start a business, do research one has to have air to breath, food to eat and water to drink, just to remain more or less healthy. All these things depend on the environment, more so than from the economics. Economies, big and small, developed and developing,  are ultimately built on the bedrock of the environment, not the other way around.

Thus, it makes little sense to argue whose fault is all this. No matter how justified that might be, at the moment it seems more of a luxury we can concentrate on after having first dealt with the problem itself. Furthermore, even for the developing countries (or especially for them) it makes good economic sense to participate in full in order to stop climate change and environmental degradation . China, among others, should do so already for its own sake, some years ago 16 of of the 20 most polluted cities in the world were in China, and river pollution threats sixth of its population.

Eventually it is of little use to have a nice car or a house or whatever if you cannot breath, drink or eat. And it might not be much better if you have to spend all the fortunes you made on a tank of fresh air and bottle of fresh water. Then again, who knows, if you are rich enough you just might be able to buy a decent carrot to go with that water.

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