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Economists and climate change

David Shearman

Economies “prosper” at the expense of our planet (source: Flickr cc)

News bulletins throughout the day are smattered with the progress of the ASX, NASDAQ and the value of the dollar.

Every night on ABC News the hushed voice of the cleric-like economist Alan Kohler issues the day’s mini-sermon on humanity’s financial future.

At the start of January each year, a raging tsunami of shoppers consumes all before them in New Year sales — excellent news for business and for the reinforcement of current economic thinking as well as for the government’s “jobs and growth” mantra. Government leaders proudly pronounce huge sales, and even if they happen to understand that perpetual growth is impossible on a finite planet, it’s all acceptable to them because the planet’s demise seems unlikely on their watch.

Neoclassical Economics, the creed of the world’s current economic gurus and especially those within national and global financial institutions, morphs with the agendas of governments to deliver their mutual needs. The practices of these players rule society and reminds one of the unsinkable Titanic sailing to its doom while the orchestra played “Nearer my God to Thee” as the ship sank. The upper social crust – bankers, industrialists and other well-healed souls – who resided on the upper decks were soon seated in life boats whilst the working poor on the lower decks went to their watery grave The cause? Disregard for the safety of passengers by Company management, and national and economic imperatives to sail with a known coal fire burning in a bunker. Equally fatal flaws present today in the priorities of governments.

Community climate change action Today’s iceberg threatening the ship of humanity is climate change, and continuing economic growth is a significant cause of the problem of rising green- house emissions and loss of the pillars of life — water, productive land, clean air and biodiversity. And coal continues to be burnt without any regard for the consequences.

Many sectors of the community and the professions are organising themselves to address this problem. While governments have failed, some doctors have recognised and spoken about the profound health impacts, an alliance of environmental groups has recognised that secure environmental regulations are essential for humanity’s future, and the organisation Farmers for Climate Change recognises that the outlook for both continuing land productivity and for their own mental health remains poor. It is difficult to find economists who are prepared to address climate change.

Current economics a “triumph of ideology over science”

For decades a few individual economists have recognised the dangers of unbridled consumerism, which is now a huge factor in generating emissions.

However note that Victor Lebow, a Marketing Consultant, wrote in 1955 “Our enormously productive economy demands that we make consumption our way of life, we need things consumed, burned up, worn out, replaced and discarded at ever-increasing pace.” [1]

Although some university economics students disagree with this paradigm, their views have been suppressed. And as noted by Prof Joseph Stiglitz, many former students of graduate economics programmes now act as policymakers in their respective countries, and the inevitable outcomes may be viewed as a “triumph of ideology over science” [2]

There are voices for change in organisations such as the Institute for New Economic Thinking. [3] However, sadly economists such as these with the ability to assist the vital creation of truly sustainable economies remain outside the main stream of governance.

The report of the Global Commission on the Economy and Climate “The New Climate Economy” (2018) noted that “Disasters triggered by weather and climate-related hazards were respons- ible for thousands of deaths and for US$320 billion in losses in 2017” and said ”we need a new class of economic models that can capture .. preservation of essential natural capital, and the full health benefits of cleaner air and a safer climate including the containment of pandemic diseases. Bold action could yield a direct economic gain of US$26 trillion through to 2030 compared with business-as-usual”

Economic action needed now The Global Commission mentioned the need for economies to adopt full cost accounting to include the costs of the harmful consequences of manufactured products to the environment and health.

Australian economists could commence their reforms with proposals for phasing out the burning of coal, which in reality is expensive if the prodigious costs of ill-health and death from its polluting effects are included in the accounting. This obvious solution to this problem has not been implemented owing to the current neoliberal ideology adhered to by governments, and their subservience to the fossil fuel industry – which provides both employment and income to government coffers. Currently some community organisations (like DEA) are working to have an increase in levies placed on air pollution from coal fired power stations.

The usage of plastic in Australia also urgently requires economic examination for the external costs which are identifiable in collection, land fill and ocean pollution. The means must be found to include these factors in the cost of commonly used products.

The current economic ship is sailing to calamity, which perhaps has motivated one well known wealthy entrepreneur to have ready his rocket ship for soaring into space and containing a group of powerful growth proponents — once fire has begun to consume the Earth. The passenger list to be headed by Trump and his mate Putin, together with many other owners of the world economy.

Meanwhile, on Earth, the population expert Paul Ehrlich pleads “Help is wanted from the economists” and the current Australian Treasurer tells us knowingly that “the invisible hand of capitalism delivers far more than the dead hand of socialism”. Wow, what expertise we have!

Those who understand the meaning of the word “sustainability” need to seize the economic ship.

  2. 2017/09/29/rational-expectations-the-. triumph-of-ideology-over-science/

Reproduced with the author’s permission. First published in Independent Australia on 1st Feb 2019: https://independentaustralia. net/environment/environment-display/the- economics-of-climate-change,12334

Dr David Shearman is a medical doctor, and is E/Professor of Medicine (University of Adelaide). He was previously attached to the faculties at Edinburgh and Yale Universities. He is also an ERA patron.

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