A Net-Zero Economy will Save $30 Trillion a Year

Phramacy

Economist argue that efficiency produces profits, which is why we see mass layoffs and (bizarrely) large payouts for executives. 20th century economists ignored a lot of opportunities for more efficient operations because the costs weren’t put on corporations themselves. The costs of running the business were covered by the governments. There is no better example of this than how companies treat the environment.

An easy example is in Alberta where companies in the tar sands have ransacked vast tracts of land for low-quality bitumen while leaving the costs of cleanup on the government. If companies had to pay for their environmental damage then the tar sands wouldn’t be profitable.

Finally economists have caught up to what environmentalists have been saying for decades: if we don’t act on the damage done to the environment by companies then all companies will suffer (obviously nature suffers more). Recent studies show that not getting to a carbon net-zero economy soon will cost the global economy $30 trillion a year due to ecological destruction.

Sylvan said he was surprised that so many saw net-zero action as “economically desirable, even on the pretty short timeline that we’re talking about.”

Most of the international climate economists questioned for the survey in February said they had become more concerned about climate change over the last five years. The most common reason they gave was the escalation in recent extreme weather events, which have included climate-linked wildfires and heat waves.

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Solar Panels are Undervalued by Traditional Markets

Solar Panel School

Solar panels are getting more efficient and the cost to produce them are decreasing by the day, already solar is cheaper than coal. Yet, due to previous policies and outdated economic models the real value of solar is underappreciated. While people wake up to the reality around the economics of solar the rest of us can call attention to the non-economic benefits of switching to sustainable power generation. Things like grid resiliency, if every home has solar panels then blackouts will become a thing of the past.

“Anyone who puts up solar is being a great citizen for their neighbors and for their local utility,” Pearce said, noting that when someone puts up grid-tied solar panels, they are essentially investing in the grid itself. “Customers with solar distributed generation are making it so utility companies don’t have to make as many infrastructure investments, while at the same time solar shaves down peak demands when electricity is the most expensive.”

Pearce and Koami Soulemane Hayibo, graduate student in the Michigan Tech Open Sustainability Technology (MOST) Lab, found that grid-tied PV-owning utility customers are undercompensated in most of the U.S., as the “value of solar” eclipses both the net metering and two-tiered rates that utilities pay for solar electricity. Their results are published online now and will be printed in the March issue of Renewable and Sustainable Energy Reviews.

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Evidence is in: Green Policies Improve Economic Performance

tree with climate knowledge

Short-term thinkers who put quarterly profits above all else consistently argue that caring for the environment destroys business. They are wrong. The evidence keeps growing that planet (and people) friendly policies encourage economic growth while also forcing companies to increase their efficiency. It’s a win-win for businesses and the planet.

An Italian team of economists have concluded that by taxing companies, and individual behaviours, that damage the environment create great success for the planet and profits.

Green taxes, or taxes levied on businesses and individuals in order to promote environmentally friendly practices, had the largest impact on multifactor productivity, though De Santis and her colleagues wrote that green taxes need to be paired with complementary redistributive policies, such subsidies and grants for companies transitioning to environmentally friendly practices, in order to avoid damaging productivity.

“What is clear is that you have to face this increasing environmental policy stringency, and as a firm, probably the best is if you try to create this win-win solution so it’s passed through an improvement in technology,” De Santis said.

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UK: Uber Drivers are Employees not Individual Entrepreneurs

bus

Uber drivers in the UK will now get better treatment from Uber thanks to the courts ruling the company can’t as robustly exploit their drivers. The way drivers get gigs and subsequently paid by the company structurally mean the company has control all aspects of the process, which means the drivers are workers since they actually have no control over key aspects of the job. This is a blow against Uber which skirts the laws in multiple countries and this decision in the UK will resonant throughout the entire gig economy.

The court considered several elements in its judgement:

  • Uber set the fare which meant that they dictated how much drivers could earn
  • Uber set the contract terms and drivers had no say in them
  • Request for rides is constrained by Uber who can penalise drivers if they reject too many rides
  • Uber monitors a driver’s service through the star rating and has the capacity to terminate the relationship if after repeated warnings this does not improve

Looking at these and other factors, the court determined that drivers were in a position of subordination to Uber where the only way they could increase their earnings would be to work longer hours.

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The Argument to Shrink the Economy Keeps Getting Stronger

The idea that we can eventually decarbonize our economy to keep it growing has been talked about for decades; sadly we’re far away from a carbon neutral economy and even it we did achieve such an economic system we still need to shrink it. What makes a “good” economy is up to us since we create the rules and laws around economic practices. Currently we designed our economic systems to be inherently unsustainable since it’s based on growth for the sake of wealth production. Instead we can make economic systems that favour environmental protection, economic equality, or any other good idea.

Regardless, we can start making more people aware that we need to shrink, rather than grow, the economy.

Green growth, Hickel concludes, is an ecologically incoherent “fairy tale.” If this seems harsh, consider what the ecomodernist position asks us to believe. The current system requires annual growth of roughly 3 percent to avoid the shock of recession. This means doubling the size of the economy every 23 years. The economy of 2000 must be 20 times larger in the year 2100, and 370 times larger in the year 2200. The green growth position rests on the assumption that this can go on, basically forever, because innovation will “dematerialize” the economy. Yet 2000 was the first year that, according to experts, humanity used more energy and materials than the safe limit. And the growth economy, far from dematerializing, remains geared toward expanding future markets for extremely materials-heavy products like Tesla cybertrucks and Apple iPhones. Comparing this to a fairy tale is, if anything, too generous, since children’s stories usually involve some kind of moral lesson applicable to the real world.

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