Being Green, Fighting Global Heating, Will Make Us Poorer


A major contention from economists is that if we decide to fight global heating in the wrong manner then we’ll make ourselves poorer than we need be. A major contention from the same economists is that if we don’t fight global heating at all then we’ll make ourselves poorer than we need be. That being the economic point about all of this, we must fight global heating in the correct manner.

The correct manner not being vast plans by bureaucracies. Instead, change market prices with the one intervention – a crowbar into the system just the once with a carbon tax – and then let the economy itself chew through the implications of that.

Do note that the argument is not “poorer than we are now”, it’s poorer in the future than we need to be in that future.

And then we’ve got the varied Green, New Deal, unsoaped hippies and socialist idiots whose demand is rather different. They are insisting that we must be poorer, now, than we are, now. These people really do have to be told to bugger off:

A sustainable environment means consuming less, not differently.

The only useful measure of how rich you are is “What are you able to consume?” Insisting that you consume less is therefore insisting upon being poorer.

It’s also entirely wrong that consuming differently won’t make a difference. Because again those economists. The thing we consume is value. That’s also the thing that we produce. That Gross Domestic Product, GDP, that is so bewailed as a societal target is nothing but the value added in the economy. GNP is the value which accrues to the people in the economy. NNI is the net value that goes as income to those in the economy. And so on through the different possible combinations of net and gross, national and domestic, production and income.

They’re all measures of value added. Not of resources consumed at all. So, if we face resource constraints all we need to do is change the value we’re producing by using fewer of those scarce resources to do so. Then we can carry on consuming ever greater quantities of value that we’ve gone and created. This must obviously be so – we do quite obviously face resource constraints currently. All economic resources are scarce, that’s what makes them economic resources in the first place, their scarcity. We don’t actually have an economics of atmospheric nitrogen because it’s not scarce. We do have an economics of soil nitrogen because it is scarce. The conversion of one to the other comes at a price – many prices in fact. The conversion itself, the algal blooms from having done so and so on. But the doing also adds value – which is then what humans consume, the value added.

So, the idea that consuming differently won’t make a difference is dribble. Plus, the idea that we must all be poorer in order to sustain that environment is drivel. Simple observation tells us that places with poor people have worse environments than places with rich.

When did a Saturday mooching round the shops stop feeling like a luxury, and start feeling more like bad sex; something you thought you wanted at the time, but which swiftly congeals to regret and self-loathing? I can still remember the teenage thrill of trying on everything in Miss Selfridge, but it’s years since I got any kind of real high from the high street. Now the sheer scale of choice feels exhausting, while the business of piling up stuff at home for the sake of it – yet another cushion, dress or lipstick – increasingly borders on the obscene. Perhaps this odd, deflated feeling is just a middle-aged thing, a sign of having acquired more than enough over the decades.

If only we had a science which discussed such things as marginal utility? Even, utility maximisation?

Going green has to be about reducing what we buy, reusing what’s already there, and reimagining our habits rather than just rebranding them. The counter-argument, of course, is that this kind of mindless shopping might not be pretty but it keeps people in jobs every step of the way; from manufacturing to distribution, marketing, managing, taxing and selling.

No, the actual observation is that people like consuming value. Which is why we do that producing value – that’s the cost, all that work, so that we can have the benefit, all that chowing down on what humans desire, value.

But Boyd puts his finger on an awkward truth, which is that we can’t go on blundering towards environmental disaster while telling ourselves that this is what makes us happy, when that simply isn’t true.

But it is what observably makes humans happy. The consumption of value. The sating of one or more needs or desires. The maximisation, within available limits, of utility.

Spending on experiences not tangible possessions is another form of economic compromise, since research suggests it’s the former that actually makes people happy.

That’s the consumption of value, the maximisation of utility. And nota bene, that it’s just consuming differently which now, apparently, makes a difference.

Personally I’ve never regretted a penny spent on cinema tickets (even if the film is terrible there’s always the joy of ruthlessly postmortem-ing it afterwards), anything done with friends or, to be brutally honest, cocktails. I would add books, if it weren’t for a few mistakes with overhyped titles that weren’t worth chopping down trees for; but really, each to their own.

Utility maximisation – and utility is always personal.

Blimey, wouldn’t the world be a better place if there was somewhere all this was codified. Into a book, or a library, where we could all catch up on it?

Look fools, economics has already considered all these points. Economics has also answered all these points. We do actually know the answer. Cut* the tax on petrol by 12 p a litre and we’re done.

*Yes, cut. The correct carbon tax on petrol is 11 p per litre. We have already added some 23 p per litre. We’re taxing petrol too much that is. Other things not enough at the same time.