Rachel Kyte’s closing comments on the blog are: “The latest IPCC report also tells us that the later you start to address the climate challenge, the more you must rely on untested technology, and costs go up. That’s not good economics.”
The argument that taking action to address climate change is good economics is persuasive, and therefore, good to use. However, we should keep in mind that the role of economics is to serve humanity and our environment, and not the other way around.
This concept is illustrated in the gospels concerning the sabbath. Jesus and his disciples were going through the grainfields on the sabbath, and the disciples began to pluck heads of grain. The Pharisees said to Jesus, “Look, why are they doing what is not lawful on the sabbath?” Jesus said, “Have you never heard what David did when he and his companions were hungry and in need of food? He entered the House of God, when Abiathar was high priest, and ate the bread of the Presence, which is not lawful for any but the priests to eat, and he gave some to his companions. The sabbath was made for humankind, and not humankind for the sabbath.”
Today, Economics is as revered an institution as the Sabbath was in Jesus’ day. When that institution does not serve the needs of humanity, it needs to change so that it does serve the needs of humanity.
Earlier this week, TD released a report on natural disasters in Canada. Craig Alexander, TD Bank Chief Economist noted that, “You end up with a perverse situation where we have a terrible flood in Calgary that actually comes with a very high toll in terms of economic, social and personal fallout, and the economic numbers actually mean we have to upgrade our growth forecast for Alberta. It leads to an underappreciation of how disruptive severe weather is.”
In other words, sometimes economic growth is not a good thing. In this case, growth comes from an economic system that rewards carbon emissions (by not pricing for it), and secondly, grows as a result of rebuilding after the disaster that was made more likely because of increased greenhouse gas emissions.
We need to adopt a carbon fee-and-dividend system, so that our economic indicators are better aligned with what is best for humanity and all life on earth.