Tuesday, January 16, 2007

Myth Buster

[Do you ever watch that show, Myth Busters, on Discovery? It's a lot of fun watching them blow up (often literally) urban legends. Anyways...]

A common argument against taking steps, and making policies, to protect the environment is that it will cost money and jobs.

Of course it will cost money- everything does. But, failing to protect the environment will cost us too.

Economics 101: for every opportunity there is a cost.

To pretend that environmentalism costs money but environmental destruction does not is illogical.

Here's an example of how environmentalism can make economic sense.

A hybrid vehicle saves its owner enough money over the car's life to make up for its higher initial prices, a U.S. automotive cost-of-ownership study said.

While gasoline savings alone are not enough to make up for higher sticker prices, financing, fuel, insurance, taxes and license fees, repairs, maintenance and depreciation more than offset the upfront cost,
Intellichoice.com of Los Angeles said.

As to costing jobs... Well, how about Toyota destroying the US competition while producing more fuel efficient cars? And Toyota opening plants in the US while Ford and GM are closing plants?

The problem of creating policies that are more 'green' is not fundamentally an economic one. It is a political one- driven by the fact that the donors to both of the major parties have a vested interest in the present system (keep enriching oneself for now, until the 'golden parachute' is prepared) and a lack of vision about a new world on the horizon. These are the same vested interests and lack of vision that are leading these same business 'leaders' to lose in the growing 'flat world' economy.

The reality is this- green policies do not have to be driven only by concern for the environment or altruistic concerns about future generations. There will be plenty of money to be made. A creative government policy which helps to shift investment from the 'old' economy to a 'green' economy can lead to an economic and environmental revival. Not without costs (remember Econ 101), but with benefits that outweigh those costs.

The same cannot be said for 'stay the course.'

GP

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