WiLD Blog

There are many reasons to be concerned about global warming, and now the Stern report on climate change has added the economic dimension to the worries we face with this mounting catastrophe. Written for the UK government by former chief economist of the World Bank Sir Nicholas Stern, the report concludes that global warming could lead to the biggest recession since the Wall Street Crash and the Great Depression.

Until Stern’s 700-page tome was released late last October, economists were generally of the view that taking action on global warming would be too costly to be warranted. Overnight, the widely-reported Stern report rewrote the economic argument. Stern added up the costs and benefits, and made it clear that failing to curb greenhouse gases would result in an economic disaster.

It’s telling of the limitations of neoclassical economics that to assess the economic implications of climate change, Stern compared the costs in reduced GDP of preventing climate change against how much climate change will reduce future growth in GDP. That’s like comparing the cost of repairing the brakes of your bicycle to the costs you will face when the brakes fail and you crash into incoming traffic.

The detailed economic consequences of global warming tallied up in Stern’s report are far more alarming than the projected drop in world GDP he emphasized to the press. Stern warns of melting glaciers reducing dry season flows to one-sixth of the world’s population, declining crop yields leaving millions of people in Africa hungry and impoverished, acidifying oceans leading to less fish to catch, rising sea levels displacing up to 200 million people, more deaths from malnutrition and heat stress.

And yet, all these vast tragedies, all these livelihoods rendered more difficult, get simplified by most economists into one measure, a hiccup in their dreams of an ever-increasing GDP. But Stern didn’t just change the economic argument on global warming. Himself a highly respected member of the economic profession, soon to return to the London School of Economics, Stern found that using mainstream economics to analyze climate change stretched the discipline to its limits. For Stern, climate change “presents a unique challenge for economics: it is the greatest and widest-ranging market failure ever seen.”

(From Adbusters Copyright 2007)

Saul

Although globalization has been a buzz word for a decade, free flow of goods, people, and money, have never really happened. But finally, true globalization is here! There is overwhelming scientific evidence that our excesive use of fossil fuels is causing global warming, and that its effects on all species, including humans, will be catastrophic in every part of our planet. Global warming is not an issue of beliefs as some politicians such as George W. Bush wants to frame it. Just like you are affected by gravity even if you don’t “believe” in it, you will be affected by climate change.

The burning of fossil fuels and the consequential global warming is a classic example of the “Tragedy of the Commons.” In his 1968 essay published in Science magazine, Garrett Hardin popularized the concept of the “Tragedy of the Commons” in reference to natural resources. TheTragedy of the Commons is a class of phenomena that involve a conflict for resources between individual interests and the common good: free access and unrestricted deman for a finite resource ultimately dooms the resource through overexploitation. The “tragedy” should not be seen as tragic in the conventional sense, but in the sense that the philosopher Alfred North Whitehead used it: “the remorseless working of things.” Furthermore, Hardin’s use of “commons” has frequently been misunderstood, leading Hardin to later remark that he should have titled his work, “The Tragedy of the Unregulated Commons.”

Peter Barnes, author of Capitalism 3.0: A Guide to Reclaiming the Commons, sees climate change as a pair of tragedies: first of the market, which has no way of curbing its own excesses, and second of government, which fails to protect the atmosphere because polluting corporations are powerful and future generations don’t vote.

One of the tragic flaws of our current capitalist system is the destruction of nature. The voracious use of our limited natural resources will continue unless future generations, pollutees, and non-human species are represented in our economic models instead of being dismissed as externalities. We need an economics with less emphasis on mathematics, more plurality, and a return to the human side of the subject. An economics that makes room for ethics and ecology, which have being excluded by the dominant neoclassical economic approach. Saul