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Jason Hickle – Why Growth Can’t Be Green

Summary:
New data proves you can support capitalism or the environment—but it’s hard to do both. This started out alarming but got better at the end.These problems throw the entire concept of green growth into doubt and necessitate some radical rethinking. Remember that each of the three studies used highly optimistic assumptions. We are nowhere near imposing a global carbon tax today, much less one of nearly 0 per metric ton, and resource efficiency is currently getting worse, not better. Yet the studies suggest that even if we do everything right, decoupling economic growth with resource use will remain elusive and our environmental problems will continue to worsen. Preventing that outcome will require a whole new paradigm. High taxes and technological innovation will help, but they’re not

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New data proves you can support capitalism or the environment—but it’s hard to do both.


This started out alarming but got better at the end.

These problems throw the entire concept of green growth into doubt and necessitate some radical rethinking. Remember that each of the three studies used highly optimistic assumptions. We are nowhere near imposing a global carbon tax today, much less one of nearly $600 per metric ton, and resource efficiency is currently getting worse, not better. Yet the studies suggest that even if we do everything right, decoupling economic growth with resource use will remain elusive and our environmental problems will continue to worsen.


Preventing that outcome will require a whole new paradigm. High taxes and technological innovation will help, but they’re not going to be enough. The only realistic shot humanity has at averting ecological collapse is to impose hard caps on resource use, as the economist Daniel O’Neill recently proposed. Such caps, enforced by national governments or by international treaties, could ensure that we do not extract more from the land and the seas than the Earth can safely regenerate. We could also ditch GDP as an indicator of economic success and adopt a more balanced measure like the genuine progress indicator (GPI), which accounts for pollution and natural asset depletion. Using GPI would help us maximize socially good outcomes while minimizing ecologically bad ones.
Mike Norman
Mike Norman is an economist and veteran trader whose career has spanned over 30 years on Wall Street. He is a former member and trader on the CME, NYMEX, COMEX and NYFE and he managed money for one of the largest hedge funds and ran a prop trading desk for Credit Suisse.

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