[OPE-L] Costs of Climate Change

From: Jurriaan Bendien (adsl675281@TISCALI.NL)
Date: Wed Oct 25 2006 - 15:42:23 EDT

The basic phobia which environmentalists cultivate is that of a crisis from
which none of us can escape, we are all in the same boat ("lifeboat earth"
and so on), the problem affects us all equally. That is their socialism,
negatively defined by an external threat to which we are all exposed

Maybe that is true in some ways, but in many ways it isn't. The overwhelming
reality which these people usually ignore, is that usually you can buy your
way out of an environmental crisis, if you have sufficient capital, and
therefore that the crisis doesn't affect everyone equally.

In economics, there are no people, only economic actors, consumers and
investors, i.e. only roles which are really reducible to numbers. And so you
can talk about costs in the abstract, regardless of any people. You just
have some numbers, and these numbers interact, and so on.

But in political economy, as I said, a critical question is "WHO benefits
and WHO loses". That's because you are dealing with real human beings with
real interests and needs, not abstract "utility-maximising economic agents
acting on rational expectations" according to some mathematical model. And
in that case you cannot simply talk abstractly about costs, you need to know
"costs for whom" and real effects on people's lives.

Where there are costs, there are expenditures, and where there are
expenditures, there are incomes. Therefore if I say 'global warming is going
to cost a lot" I am also saying that some businesses stand to make a lot of
money out of global warming. You don't need to be Milton Friedman to
understand that.

I suppose the first step in a more profound analysis would be to distinguish
between diferent cost centres (costs for individuals, companies, the state,
insurance and so on).

A second step would be to ascertain whose friends the Friends of the Earth
really are. And basically they are friends with anybody who is
environmentally friendly. If the working class are not environmentally
friendly, well f**k the working class. If the capitalist class are not
environmentally friendly, well f**k the captalist class, and so on. That's
the ethic, we're for the earth, never mind particular people. Sort of like,
fair-weather friends. This shapes their analysis.

A third step would be to distinguish between priced costs and costs which
cannot be priced, as you do. However, the point of the report as I
understand it is precisely to argue there will be a huge *financial* cost
due to global warming. This is basically a warning to those who have the
money that they will have to pay - it is irrelevant to those who haven't got
it, because they cannot pay anyway. Point is that if money is paid, somebody
is earning it as income, and making a good profit.

So basically Friends of the Earth want to have a wholesome earth while
ignoring political economy. "Yes but", you might say in fairness, they
specifically try to estimate the financial cost of global warming. "Yes
but", why should I try to calculate costs and expenditures for capitalists
and their state so they can calculate what's profitable for them and what
isn't, when they're not even paying me?

In reality, the general tenor of business discussion is that governments
should plow more money into environmentally friendly stuff because otherwise
it is simply not profitable. There are admittedly also honorable exceptions
to this by a few vestiges of private entrepreneurship (e.g. Sir Richard
Branson) but they're the minority.

In this context, the Friends of the Earth just promote moral panics and
alarmism, which really do not cut any ice. The real question is "who can
really solve the environmental problems, what are the real preconditions,
and who pays for environmental crises?". The richest capitalist classes on
earth fight a useless war in Iraq (also an ecological disaster) in
preference to reducing their own dependence on oil, they are prepared to
spend two trillion dollars or more to assert their dominance. Can you expect
people with such a myopic outlook to solve global environmental problems? I
think that people who think that, are thick in the head. It's just rhetoric
in between holidays in the Bahamas or wherever they go these days.

I will say that I am personally very suspicious of Green economics, because
in my experience these people talk so much ******. On the one hand, they
reject the very concept of GDP as a valid measurement on the ground it does
not account for environmental resources and depletion. On the other hand,
they freely use GDP figures to extrapolate that future environmental costs
will amount to such-and-such percentage of GDP, and often you get the
distinct impression that they value the land more than the people who have
to live on it. They're economists, not political economists.


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