We've all heard about the Government's wish to be the greenest ever but do we have the economic structures to actually achieve something meaningful? If green technologies are to take off - and let's concentrate on green energy for the moment - then either they have to compete within the current economic framework or that framework has to change. The latter seems like a step too far so how can the former work? The obvious answer is that externalities should be priced in to energy production technologies - in particular, the cost of CO2. We do have a carbon market of sorts but I'd argue that it's not yet coherent. Why? Possibly it is because it has to be a global market - CO2 distributes right across the planet - but we have a major player refusing to take part (i.e. the US not supporting Kyoto and not looking likely to change its stripes in the near term). This is depressing because until such time as we do have externalities properly priced in we will continue to over-consume fossil fuels, damaging the environment, until they become sufficiently scarce for the "traditional" economic signals to kick in. Potentially that will be too late.
What could happen, of course, is that emerging nations - China, India, Brazil, become the new engines of growth fuelled by clean new technologies and leave the US and Europe behind in the old ecomonics. Can they survive on their current major export - financial services? Having just seen those industries mess up big time one has to be doubtful.
Expanding out from the narrow confines of CO2, we need to think about all those "commodities" that we should regard as scarce. We need now to create markets in biodiversity, watersheds, forests that are designed to limit the consumption of these resources. This is a huge transformation in thinking. Do we have the time?
No comments:
Post a Comment