Reevalutating Priorities in the Green Movement

Alan Greenspan, the famous former head of the US Federal Reserve, issued a statement yesterday in which he warned that high oil prices were beginning to hurt the economy. He points out that the only way prices are going to go down is if demand for oil drops. Greenspan compares the current transition away from fossil fuels to “watching grass grow”. Beats watching paint dry, I suppose.

The environmental movement — and in particular climate change — is often portrayed as a tradeoff between the economy and nature. The implicit assumption is that you can’t have environmental improvement without economic hardship. This is false. In any changeover of technologies and business practices there are losers, but there are also many winners who are able to take advantage of the new opportunities that present themselves.

It is usually individual corporations that fight change, of any kind, because they fear they will be left behind when new business models capitalize on the new situation. Our overall economies, however, are much more flexible than that. In the past periods of great transition have lead to economic growth; both World Wars were followed by booms.

In the UK, a number of major corporate leaders have actually written an open letter to Tony Blair, pressing the government to implement tougher emissions regulations. Wisely, they point out that unless the changes are mandated by law, the chances that most corporations will make them on their own are slim.

The scientific evidence is showing that human-induced climate change may be happening even faster than expected. It is clear to us that the need for ambitious and long-term action is becoming ever more urgent.

At a higher level, our main problem is in the way we as a society choose to measure our progress.

Currently, the golden standard is the Gross Domestic Product, or GDP. This statistic measures only the monetary value of the goods and services produced by a country. It does not, however, take into account any environmental or social damages that may be inflicted in order to produce these goods and services.

This is akin to adding up the value of your bank account, your house, and your car, and declaring that you have a self worth of, say, half a million dollars — but at the same time not bothering to take into account your mortgage, credit card debts, and other liabilities you might have. Personal finance does not work like that, so why do we measure our national and international progress in such a misleading manner?

This has lead to the invention of so-called Green Economics, which revolves around three main axioms, or truths:

1. It is impossible to expand forever into a finite space
2. It is impossible to take forever from a finite resource.
3. Everything on the surface of Earth is interconnected.

From this has evolved new methods of measuring progress, one of which is called the Genuine Progress Indicator, or GPI. It is designed to replace (or more realistically, augment) the GDP as a measurement index. In additional to pure economic growth, a GPI calculation takes into account pollution, environmental degradation, standards of living, crime, and other negative factors that may occur as side-effects of economic growth. It then determines exactly how beneficial the changes have been for the citizens of the country.

A country that pursues pure economic growth at the expense of these other factors will receive a low GPI score; a country that grows more slowly in a balanced, responsible manner will receive a higher GPI. In this way, the GPI comes closer to measuring “true progress” with the assumption that the overall well-being of humans is the ultimate goal.

Of course, we’re a long way from seeing GPIs reported on the evening business news. Much in the way we idolize individuals who flash their wealth and conspicuous consumption without really caring whether or not they can actually afford to live the lifestyle, we also tend to look at the wealth of our nations without thinking about how sustainable their behaviour might be.

Once again, our biggest obstacle is our own societal mindset: to fix the environment, we don’t just need to embrace new technologies, we need to develop a newer, more mature way of looking at the world.

In short, we need to re-evaluate our priorities.

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