Slaying Green Premiums
“If the market told the truth, it would be telling the whole damn ecological truth”
Jack jumped in, angrily,
If ‘the market’ told the truth, it would be telling the whole damn ecological truth, not just a feel-good, endless-growth, prosperity-for-all bullshit myth. Let’s get real here, folks! It is a profound market failure — criminal negligence, I would submit — not to include the pollution-related health care and climate-changing costs of a ‘petroculture economy’ built almost entirely on the continuous burning — for over two hundred years now — of massive quantities of fossil fuels. This half-blind free-market model is tragically failing us in a massive way.”
Jack acknowledged that free-market economics has, up to now, been generally successful at improving the human condition. The distribution of goods, services, and other assets is facilitated through open and free buying and selling, supporting a dense network of exchange, that is available to everyone.
It incentivizes producers to know their markets and respond to them instead of relying on top-down governmental regulations. Learning happens continuously from experience so, in a competitive environment, processes naturally become more effective and efficient over time.
And a free-market economy supports a more egalitarian society than many other forms of controlled economic systems. There is incontrovertible evidence for centuries of positive social gains on many fronts that are correlated with free-market expansion: a clear and steady decline in violence of all sorts along with equally impressive increases in human health, longevity, access to education, and global human rights. All that is undeniably true. And very good.
But now, given the collective impact we are having on the planet today from our large numbers, widespread affluence, extreme wealth inequality, and potent new technologies; that classical free-market economic system needs to be urgently restructured to send both a market price signal, reflecting private 'utility,' and an ecological price signal reflecting the trans-private burden of any economic transaction on public goods and environmental resources.
The ‘commons’ — our atmosphere, oceans, and forests — are being indiscriminately destroyed in today's free-market pricing system that lacks any meaningful ecological impact pricing signals. Prices must reflect the truth — the whole truth — of honest economic value. And this composite market-ecological price could be a basis for 'taxing the bads' — like a carbon emissions tax — more honestly.
The composite market-ecological price would reveal a truer relationship between common environmental resources and individual desires by factoring in how much is given up or sacrificed publicly, and over time, for what an individual desires in 'private utility' right now.
Then, the green premiums associated with more expensive but more environmentally friendly technologies would likely quickly disappear, and those technologies would quickly replace the environmentally destructive cheaper options in our current free-market economy.
“We can’t keep on powering a world coming up on eight billion people by continuing to burn grotesquely large amounts of fossil carbon and expect the Earth’s biosphere not to choke and gag on the accumulated exhaust. We must build in some feedback mechanisms to disincentivize this behavior over time. Our planet’s climate appears innocuous enough. But make no mistake my friends, she is an ornery and temperamental beast, and we are foolishly poking at her with sticks. What could possibly go wrong?! It’s a stupid, reckless, and dangerous game we are playing here, folks. We must change our ways.”
Jan’s reaction was not surprising coming from a corporate attorney for Big Oil.