Root of all evil?
For some people money is the root of all evil. But it is the love of money that is meant to be the root of all evil. Economists say that money represents the most efficient way of allocating scarce resources ever invented. Capitalism has delivered rising standards of living throughout the world wherever it has operated. Redistribution policies have helped to lift billions of people out of extreme poverty. As a result we now live the longest, healthiest, most entertained lives ever.
Some climate change campaigners insist that capitalism must be dismantled before climate change can be properly addressed. Hard data show otherwise, as explained here:
Throughout history humanity has plundered the environment and used it as an open sewer for waste (as have all other life forms). The problem now is we have become too successful at it. If we want to make the world a better place for those coming after us we must address the spiralling degradation resulting from that success. That means being willing to allocate sufficient resources to preserve the conditions we inherited, and even improve them where it makes sense.
Ecological Economics starts by recognising that the human economic system is embedded within a finite environmental system. It can therefore be considered to be the science and management of sustainability, linking environmental, social, and economic systems together.
To fix the climate problem, government policies are therefore needed that sufficiently reduce environmentally harmful activities, whilst otherwise allowing people maximum economic freedom to create public ‘goods’.
Global Mitigation Rewards
It is now being argued that carbon pricing alone as an economic instrument will be insufficient for solving the climate crisis. As such, it is proposed that funds be made available for greenhouse gas capture and sequestration. It would be paid for using a new global currency called Complementary Currency for Climate Change, and accordingly the policy is called global4C. The currency would be priced to match the perceived risk of catastrophic climate change (Risk Cost of Carbon, RCC) and would come from central banks as ‘printed money’.
Next: Carbon Pricing