Wednesday, January 14, 2009

Organic economics

I have an inkling of dissatisfying conclusions that I would like to work around. (please point out logic errors)

The premise is that economic growth causes increased consumption of energy and resources. (Even the service economy uses energy.)
The (un)conventional wisdom is to shift to a green, organic economy.
My fear is that while the green elements of the economy are good (organic farms, green energy, etc) for the local environment and health of everyone involved, the total global resource consumption stays the same.

The reasons for this are a) governments strive to keep the economy growing at 2%/year (higher for developing countries); b) any cost greater than the market price for conventional goods is either b1) inefficient and slows economic growth (which is then compensated for by pro-growth government policies); or b2) extra money that the farmer/producer uses to increase production or standard of living (consumption - even green consumption is still consumption).

My (sub)conclusions are:
1) green growth is an oxymoron, net greening only occurs when growth is zero or negative
2) real green spending will have a negative effect on the economy

Image that all the goods and service in the world were "green", ie zero carbon footprint, fully sustainable. This would mean that this "green" economy could expand indefinitely. Even hypothetically this wouldn't work, eg. indefinite increases in organic food production would still require increases in land use.

One problem with negative or zero growth is that it disproportionately affects the poor and unestablished.
a) more people are pushed below the poverty level (for neg growth, ie less money)
b) no new jobs are created
c) no wages are increased
d) innovative ideas which lead to better (more efficient) ways of doing things cause people to lose jobs
e) developing countries stagnate
etc, etc.

So, it seems that green is anti-growth and anti-growth is anti-poor, so green is effectively anti-poor.

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