The visible hand in economics

Archive for the ‘Environmental’ Category

My favourite article of NewScientist’s series is Herman Daly’s. The father of modern ecological economics lashes out at the way economists ignore the source of inputs to production and the capacity of the waste sinks that we have. As he puts it, we should imagine the economy as a system within the world’s ecosystem. Read the rest of this entry »

So we are going to have to cut our consumption and it’s not going to make us better off. How come NewScientist’s authors seem to agree that we won’t necessarily be unhappier? Where evidence is given it tends to be in terms of happiness measures. Kate Soper (London Metropolitan University) points out that wealth doesn’t correlate with happiness over USD15,000 of income, while Andrew Simms (New Economics Foundation) makes much of the fact that people with vastly different living standards report the same level of happiness. The difficulty is that happiness isn’t the kind of measure that works for cross-country comparisons. Read the rest of this entry »

An important question raised by the writers in NewScientist’s feature is whether we will be less happy living sustainably. This is the part of the series I felt was weakest. The general consensus amongst them is that we will actually be happier if we live sustainably because we will live healthier lifestyles. David Suzuki claims that ‘we would go out and walk around because there would be shops, musicians and people out on the street that we’d want to meet’. Kate Soper thinks we’d ‘…enjoy healthier modes of transport such as walking, cycling and boating’.

The authors appear to be projecting their own lifestyle preferences onto others here. It is this element of the environmental rhetoric that bothers me most: the idea that we would all be happier people if only we were more like them because they know what’s best for us better than we do. Read the rest of this entry »

It looks like National has decided not to continue with the previous government’s plans to introduce a standard for lightbulb efficiency. They say

We want to encourage people to [switch], we think there may be benefits for them to do it, but it should be a choice they make as consumers.

It’s a good point: efficient CFL bulbs are tough to dim, take time to reach full brightness and don’t bring out the sparkle in chandeliers, apparently. So why would we want to force everyone to use them when they’re clearly not suited to some applications? Of course, if people did use them in their homes and offices, where they are suitable, it would be great for reducing our national power consumption. Read the rest of this entry »

I’ve recently been browsing old magazines and my attention was grabbed by a feature in the October 18 edition of NewScientist. In it they collate a series of articles under the heading ‘Why the economy is killing the planet and what we can do about it’. At first I was disappointed that a publication puporting to be scientific in nature was resorting to scare journalism and economics bashing; however, there are a number of interesting ideas in the articles that bear discussion. Read the rest of this entry »

The DomPost contained an article on the potential for metering Wellington’s water supply. The question is asked: should Wellingtonians pay for their water? This issue is a hot topic, having been discussed at Kiwiblog, Infometrics and TVHE earlier this year.

Historically, water has been provided for by the various Wellington councils out of rates. Water is not currently metered, which implies that regardless of how much water each household takes, their rates do not vary. This arrangement has led many to believe water is in some way ‘free’, as they are not forced to pay for their specific usage and the cost is embodied in rates which cover many council services across many households. With water use of 400 litres per person per day in Wellington, relative to the national average of 160 litres, it appears water users here are not internalising the cost of their water usage.

Current arrangements do not allow for the pricing of scarcity. Read the rest of this entry »

So the British are increasing the international departure tax, and stating that it is an “externality tax”.  What spectacularly wrong-headed logic.

The externality they are talking about is “carbon emissions” – now as long as they tax the fuel that airlines use the externality is accounted for, as the carbon emissions stem from fuel use.  Adding a tax on top of an efficient externality tax is not efficient.

The real reason the British government is doing this is straight out protectionism – they believe that the impact on “outflows” from Britain will exceed the impact on tourist “inflows”, a factor that would improve net exports and help to “protect” the retail industry in Britain.  Beyond this, the increase in tax is also a simple tax grab – one that taxes tourist industries the rest of the world over.

No wonder we in New Zealand are unhappy (*, *)

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