The economics of climate change

By | | comments |

While the rich get richer, not only do the poor get poorer but the environment continues to suffer, writes David Shearman.

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 cleric-like economist Alan Kohler issues the day’s mini-sermon on the financial future of humanity.

In new year sales, a rampaging tsunami of shoppers consumes all before them, excellent news for business, current economic thinking and for the Government’s “Jobs and Growth” mantra, let alone their own employment. Government leaders proudly announce huge sales and, even if they understand that perpetual growth is impossible on a finite planet, its demise is unlikely on their watch.

To many of us, the stock market and the economy is like baking a cake — it rises or falls and discussions focus incessantly on the ingredients; the current bakers are the neoliberalists who manoeuvre for an increasing slice for themselves whether the cake rises or falls.

The creed of neoliberalism

Neoliberalism is the creed of current mainstream economists of national and global financial institutions. It partners with governments to deliver their mutual needs.

In the words of 15-year-old Greta Thunberg, who spoke at climate conference COP24:

“Our civilisation is being sacrificed for the opportunity of a very small number of people to continue making enormous sums of money.”

Neoliberalist economists rule society and remind 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 who resided on the upper decks were soon seated in lifeboats, whilst the working poor on the lower decks went to their watery grave.

The cause was the disregard for the safety of passengers by economic priorities of the company management and by the national imperative to sail when a known coal fire was burning in a bunker.

Community action on climate change

Today’s iceberg threatening the ship of humanity is climate change. “Jobs and growth” is a significant cause of the problem of rising emissions and loss of the pillars of life, water, productive land, biodiversity and clean air. Coal is still burning in the bunker of the neoliberal economy.

In Australia, while governments fail on climate change, the community addresses the problem without the economists. Doctors for the Environment Australia identify the profound health impacts of climate change; an alliance of over 50 environmental groups recognises that secure environmental laws are necessary for our future, and Farmers for Climate Action recognise poor outlooks for productive land and their mental health. Where are the economists who work for all humanity?  

Current economics a “triumph of ideology over science”

This statement by Joseph Stiglitz summarises his current economic view.

Yet for decades, some individual economists have recognised the dangers of consumerism which is now a huge factor in generating greenhouse emissions.

In 1955, Victor Lebow, a Marketing Consultant, wrote:

‘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 an ever-increasing pace.’

Internationally, there are voices for reform (Committee on Monetary and Economic Reform, or COMER) and in Australia the Institute for New Economic Thinking, Economic Reform Australia (ERA) and Sustainable Population Australia (SPA). However, their economists who understand a sustainable economy remain outside the mainstream of governance and power.

The climate change risks to the economy are well recognised.

The 2018 report of the Global Commission on the Economy and Climate stated:

‘Disasters triggered by weather and climate-related hazards were responsible for thousands of deaths and US$320 billion in losses in 2017. 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. Bold action could yield a direct economic gain of US$26 trillion through to 2030 compared with business-as-usual.’

Economic revolution now!

The Commission called for economies to adopt full cost accounting to include the costs of harmful consequences of a product to the environment and health.

Australian economists could commence accounting reform with proposals for coal and gas, which are expensive if the prodigious costs of ill health and death from emissions and pollution are included. This solution is prevented by current government ideology, subservience to the fossil fuel industry and the income it provides to government coffers.

The current economic ship is sailing to calamity, which perhaps motivates one well-known wealthy entrepreneur to have his rocket ready to soar into space once fire consumes the Earth. The passenger list of powerful growth proponents might be Trump and his mate Putin, and many of the owners of the world economy. Oh... and bankers with cashed bonuses, guilty of having been found out, will now travel economy class.

For them, there are infinite blue-green living planets to invade and exploit with Jobs and Growth.

Meanwhile, on Earth, population expert Paul Ehrlich pleads “Help is wanted from the economists” and Josh Frydenberg 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 word “sustainability” need to seize the economic ship.

Dr David Shearman AM FRACP is Hon Advisor to Doctors for the Environment Australia, a member of SPA, a Patron of ERA and Emeritus Professor of Medicine at Adelaide University.

Support independent journalism Subscribe to IA.

Recent articles by David Shearman
Deteriorating health, housing and education upshot of inequality

A broken promise is of no consequence when $254 billion for tax relief could be ...  
Electric vehicle transition has huge health benefits

A transition to electric vehicles would not only help the environment but provide ...  
Cooking with gas: A gaslit toxic health hazard 

Neither clean nor green, it turns out lauded natural gas is a toxic mix of harmful ...  
Join the conversation
comments powered by Disqus

Support IAIndependent Australia

Subscribe to IA and investigate Australia today.

Close Subscribe Donate