Green economics: turning mainstream thinking on its head
February 21st, 2008 by Jim JustThomas Prugh writes at WorldWatch Institute the fundamental ideas of mainstream economics – including reliance on GDP as the key index of general well-being – have outlived their time and usefulness. But these ideas still dominate assumptions and thinking about economic matters in academia, the media, governments, businesses, and popular consciousness.
In recent decades, economic thinkers have suggested ways to make economics truer, greener, and more sustainable. A “green” economics would consider:
- Scale. How big is the global economy relative to the global ecosystem? This is crucial, because the economy resides totally inside the global ecosystem. Economic activity is basically converting bits and pieces of the ecosystem to human uses: trees and forests into lumber and houses, grasslands and other habitats into farms to feed the billions of humans, and so on. Our focus on economic growth has resulted in exceeding ecosystem limits. Symptoms include climate change, species extinctions, dwindling rainforests, water shortages, etc.
- Stress development over growth – that is, make the economy better at satisfying human needs, not simply bigger. The global economy simply cannot keep growing forever. And, beyond a certain and fairly modest point, there’s no correlation between material wealth and happiness. There is a correlation between happiness and things like social relationships, family life, and a sense of community.
- Make prices tell the ecological truth. The reform would be actually applying this rule to the ecosystem through measures such as carbon taxes. Other ecosystem services we’re not accounting or paying for include such things as the pollination performed by honeybees, air and water purification, soil generation, pest control, seed dispersal, and nutrient recycling. Not properly accounting for these services results in destruction of ecosystems and the undermining of these services.
- The precautionary principle. This is just the age-old wisdom of “first, do no harm” and “look before you leap.” It’s just good risk management.
- Commons management. People generally believe that there are only two workable regimes for managing resources: private property or government control. But commons management regimes are a third way, one that taps the strong human impulse toward cooperation and the common good. Commons management has proven itself over centuries of experience.
- Value women. All over the world, women earn less than men for equivalent work, they lack access to land and credit, and they do more than their share of child- and elder care, volunteer work, and other unpaid labor. This gender bias actually suppresses economic activity.