1. Action on climate change is a business opportunity
This is most relevant to the situation in New Zealand, but it can be applied elsewhere. If you even remotely follow climate change you will see that investment in green technology is skyrocketing. Even if it seems like a bubble (and I think it’s only just getting started), there are a few prudent individuals who are going to come out of it with a lot of money. At this stage, developing the right technology could be very lucrative in the future.
In New Zealand’s case, the ‘green’ industry is not only potentially a potentially lucrative enterprise, but it is absolutely vital that we continue to maintain our image as a clean green paradise from the outset. In fact, a report by the Ministry for the Environment stated that New Zealand’s green image “is worth at least hundreds of millions, possibly billions, of dollars.” Yet with only a little bit of digging, it’s actually quite obvious that we are not as green as we claim to be. As fossils fuels and minerals continue to decrease in abundance, it won’t be long before we are forced to make some tough economic decisions. Recent mineral explorations in New Zealand have sparked this debate. The debate is only going to intensify, with reports claiming that New Zealand may be an excellent source of mineral deposits and fossil fuels in the future. This is where the conflict between favouring the environment, and favouring the economy, comes into play in the New Zealand context.
So, the first question is – should we swap our green image for the short term lucrative fossil fuel market? The second question is – do we have to?
The answer to the first question is no - we should not trade our clean, green image for the short term lucrative fossil fuel market. It’s not that going completely green is going to be the silver bullet to prosperity, nor is it that a green tourism sector is more profitable than our world class agricultural sector. However, if we want to turn away from a market that could potentially be worth trillions in exchange for dirty 20th century business methods, there should at least be some serious debate beforehand.
In answer to the second question -- do we have to? -- no, because the green industry is potentially lucrative in itself. If New Zealand focuses on pursuing sustainable business practices, the choice between the environment and the economy doesn’t need to be made. Groups like Pure Advantage are pushing this idea, and provide a strong argument for New Zealand to move in this direction. We need to stop believing that only a carbon based economy is a strong economy.
2. The environment and the economy are symbiotic
We depend on both the environment, and the economy to sustain our standard of living. Both spheres should be treated with respect. At the end of the day, our planet will go on without us, but we -- humans -- are the ones that are going to take the full hit. It is well known that when there is more moisture in the air, the number of extreme weather events are expected to increase. Numerous reports highlight the risk that insurance companies face in these circumstances. This isn’t theoretical, but actually happening, with insurance companies paying out much more over the years due to strange weather. Some of these freak weather events have cost a fortune. As a single example, Hurricane Katrina’s total economic cost is estimated by some to be over $200 billion.
Whether or not climate change ‘caused’ the an individual weather event isn’t the issue, although there are a group of scientists who are taking the bold step of trying to link extreme weather events to climate change. The main issue is that if we are expecting an increase in extreme weather events, it doesn’t take an economist to realise that this might cause more unexpected costs in the future. The climate we currently take for granted might change in a way that is unhelpful for us. Surely we can all agree that most businesses don’t operate as well when submerged under water, or in the middle of a hurricane.
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For these reasons, we should take preventative measures to avoid unpredictable and devastating natural disasters. It will also most likely be much cheaper in the long run. In my view, humans have always used technology to solve the issues they encounter, such as the invention of automobiles and aeroplanes in the case of transport, or the use of telegrams and the Internet to increase our communications capacity. At the moment, we are facing both economic and environmental issues with energy -- we can no longer produce cheap, abundant energy without destroying the planet, and our rates of consumption are far too high. Finding a way of producing cheap, efficient and sustainable energy not only solves the economic problem, but also contributes to the solution to anthropogenic climate change. There’s no reason why we can’t kill two birds with one stone.
The damage that climate change is doing to our economy highlights the symbiotic link between the two - and to change one, we have to take care of the other. Action on climate change can be taken, and not only will it not damage the economy (certainly not in the long term), but may in fact improve it. To have to choose between the two is nothing but a false dilemma.