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When Economics Fails

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By Tom Drake

Climate-Sceptic, Econimist and Champion of those who want to back up their apathy towards green issues with ‘intellectual’ argument Bjorn Lomborg, is sounding off in the Guardian again.

The essence of his argument is that it will cost more in terms of Global GDP to combat climate change in any sort of preventative way than to simply deal with the after effects.

Many of his opponents get bogged down in debating various meteorological and economic forecasts both of which have barmy margins of error making any sort of cost/benefit analysis fairly useless. Some people treat economics as having the answer to any question if you ask it in the right way. But it doesn’t. Economics cannot value an ecosystem or a Human life. Indeed, when it tries to you get some pretty unpalatable results (eg. If you judge a life by the quantity of money the individual or her society is will to spend in order to save it then a western life is more valuable than another).

Capitalism demands constant growth. In a finite ecosystem with using finite resources at some point there is going to be a problem. The logic of using sustainable resources (we can think of solar power etc. as infinite) should be obvious. The question is then of when we need to transfer from finite to infinite resources in terms of limiting environmental and Human cost. There is now a mounting body of scientific work, something economics has no way of evaluating, suggesting that this time could be imminent.

The economic ‘consciousness’, if we think of the global market as a decision making entity, is not equipped to make a judgment on climate change so there is no point in having the kind of argument Lomborg is generating. You don’t buy a lifejacket because it makes economic sense. You buy a lifejacket based on an evaluation outside of monetary determination, that it might save your life. Not how much it might cost to pay for your funeral.

The market must be regulated artificially in order to combat the probable effects of our various industrial emissions. Indeed many business leaders are already calling for this, implicitly recognizing the market's inability to deal with this situation.