Climate Change: It’s about the economy, stupid

Catastrophic climate change is the moral issue of our time. If we flub it, it is our children who will be denied their most basic inheritance – a habitable and sustaining planet.

The response of business groups and the federal opposition to the Government’s release of treasury modelling showing the economic costs of various emission reduction targets was tedious. The Australian Chamber of Commerce and Industry demanded compensation while the opposition leader called for the scheme’s implementation to be-wait for it-delayed.

To date the debate has presumed the existence of a conflict between the demands of the economy, and those of our failing planet. Careful policy prescriptions are deemed necessary to mitigate this clash. These beliefs are summed up by Treasury’s principal finding that, “The world and Australia can significantly reduce the risks of dangerous climate change and maintain robust economic growth.”

This statement needs to be rephrased. It should read: “If Australia wants a functioning economy at all, it must significantly reduce the risk of dangerous climate change.” Another way to put this is that when it comes to climate change, decision-makers need to understand-to paraphrase Bill Clinton’s famous electoral slogan-that it’s about the economy, stupid.

That the continued health of the economy depends on the health of the planet sounds like the “duh” statement of the year, but in a world still saturated by neo-liberal economic ideology, it remains highly contested. The argument goes like this. The economy requires “inputs” from the eco-system. It uses these to produce goods and services that are returned as “outputs” to the ecosystem as waste. The overall size of the ecosystem-the amount of water, land, air, minerals and other resources available as inputs-is fixed, but our economic system is built on an assumption of endless economic growth. The demand for growth has led to rapacious global economic growth with which the planet can’t keep pace.

Herman Daly, former senior economist at the World Bank, did the maths years ago and discovered it just didn’t add. He argues that catastrophic climate change is just one manifestation of our tragic miscalculation. Back then, few listened. Now, with polar bears clinging to ice floes and neo-liberal icons like Alan Greenspan spouting mea culpas in US congressional hearings, some are tuning in.

But we must attend to the whole of Daly’s message. Not just his indisputable planetary sums, but the way he makes his case. Not in the language of green purists, eager to wave their fingers at capitalist excesses and tell us how much happier we’ll be when we eat slow food, but in the language economists and decision-makers understand. The language of money.

Daly says that a planet emptied of forests, stripped of biodiversity and covered in waters that contain no fish cannot provide the raw materials an economy needs to generate profits, or to function at all. “Our economy is now reaching the point where is it outstripping Earth’s ability to sustain it. Resources are running out and waste sinks are becoming full. The remaining natural world can no longer support the existing economy, much less one that continues to expand.”

His message is clear. That the economy isn’t just killing the planet. It’s killing the economy.

If the language of the almighty dollar is the only one business and conservative political leaders understand, we must use it to argue for an immediate and vigorous response to climate change.

Because time is running out.

Publication history

Climate Change: It's about the economy, stupid  Sunday Sun-Herald (Sydney)