Posted on Apr 18, 2013
We tend to think we are in deep economic shit as it stands in neo-liberal economic terms. Our current system does not count externalities as a simplification that economics has used for more than a century to keep the math simple and profits looking good. Somehow, despite all the quantitative easing and low interest rates, the mighty economy is in the toilet. Despite everything the wizards of wall street try to do with their magic computer wands, the economy wants to stop growing. Imagine that, an economy that doesn't grow.
Then along comes extensive research on that uncharted economic island called externalities, specifically the ones referred to as natural capital that we don't count to keep things simple. The added complexity of adding externalities to our economic system would be helpful no doubt, as it would start to take account of our children's future, health impacts of air and water pollution, and much more that actually makes life possible. So, what is the real bottom line? Just what you'd expect. Those great profitable companies like BP, Exxon, and Shell for instance are NOT really profitable.
Good thing we can power our computers with solar power, as we're going to need to. Finally it is time to put those CPU cycles in computers to useful purpose, crunching the economic numbers based on the inclusion of natural capital. Once our children see the numbers and their implications for their future it won't be long til they demand a carbon tax and a water pollution tax, not to mention other taxes on activities that damage our soil. Since we live in a closed system, that other notion that will be thrown out as junk is growth as a paradigm for economic success. In the real natural world only a closed loop, steady state system will work, and that means that what we call growth today must end.
Here is the link to the Grist article - "None of the world’s top industries would be profitable if they paid for the natural capital they use" by David Roberts.
Check out the UN sponsored report for all the details - TEEB Final Report (PDF)