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  Issue No 34 Official Organ of LaborNet 08 October 1999  

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Economics

Green Backs and Dirty Dollars

By John Macleay

Paul Ehlrich says the real culprit behind the environmental crisis isn't so much the huge numbers of people in the world or conspicuous over-consumption in the West but an economic system that confuses price with cost.

The lanky Stanford professor of biology and best-selling author shows none of his 67 years when he tells his audience that the price of gasoline in the United States is cheaper than Perrier mineral water.

"The price might be that. But the cost is much different.

"We end up paying the cost in other ways, through damage to the atmosphere in the loss to our health with polluted air. These are the things economists call externalities, the things that are not measured by price but which have a cost that we all pay for.''

In fact, Ehlrich's message has not changed in the 30 years he has been a public figure. All six billion of us, and especially the "rich'' one billion in the West are living off the World's environmental capital rather than it's income - the very definition of unsustainability.

"It's really basic economics 101,'' he says, pointing to an article penned by the Australian Financial Review's economics editor Alan Mitchell.

Mitchell, even though he has not read the book, takes issue with the work that made Ehlrich a household name more than 30 years ago - The Population Bomb.

Mitchell, like so other many business economists, sees the fall in the price of commodities as proof that the Club-of-Rome type predictions made by the likes of Ehlrich have been proven wrong. Likewise, his prediction of mass-starvation.

"Sure, the price of commodities now are cheaper than they have ever been But that's not the issue,'' Ehlrich says.

"It's the rapid delpletion of the very things that enable life to take place on the planet. The loss of top-soil at a rate far, far greater than it can be formed, the depletion of fossil water in acquifers, loss of biodiversity at a rate not seen since the extinction of the dinosaurs 65 million years ago, global warming,'' he says.

All these are symptoms of a economic system that takes no account of the cost of environmental destruction in the pricing of goods. If it did, the price of many goods would be far, far more expensive.

Indeed, Ehlrich lost a famous bet made in 1980, getting on the wrong side of a prediction that the price of basket of commodities would be cheaper by 1990.

Ehlrich, along with two other colleagues were each out of pocket to the tune of $100. But the business economist refused the bet when Ehlrich upped the stakes to $15,000 on the proviso that the criteria should be along the depletion of forest cover, biodiversity, loss of soils and fresh water. In fact, he's still itching.

But this is not to suggest that Ehlrich is down on all economists - just the opposite.

He says some of the most interesting work today in the field of ecology and biology takes place at the intersection of economics. The likes of the World Bank's former chief economist Herman Daly has suggested a new measure of economic well-being which incorporates environmental costs into economic well being.

And as for the predictions of his most famous book? Ehlrich tells his Sydney audience that The Population Bomb was too ''optimistic''. He says that it was written before the ozone hole was discovered, before global warming become known and before HIV/AIDS was ever an issue.

Sure, 10 to 15 million people a year continue to starve to death. That's 300 million to 450 million in quantum since the book was published in 1968 despite the best efforts of the Green Revolution, which made great use of ehancing plant yields with massive amounts of fertilizer and water.

Ehlrich is quick to say he is no expert in the field of gene-technology and, like any good scientist, points out that genetically modified food has to be assessed on a case by case basis. But he holds out little hope that it will be the panacea to feed the world's poor, especially given how quickly insects become resistance to food where so-called "natural'' insecticides have been inserted into them.

Ehlrich is also no stranger to Australia, having spent a year at Sydney University on sabatical in 1965 and has visited the country every year since.

Like Los Angeles where he lives, he's astounded also by Sydney's growing car dependency and says the overthrown of the automobile will be first step towards a livable city. Funnily enough, that comment drew the loudest applause.

He says that if anywhere should set an example to the rest of the world in how to promote sustainability, it should be Australia, given its affluence and relatively low population numbers.

Ehlrich says it is almost a criminal shame that Australia's solar industry has been virtually knobbled by government but this is symptomatic of a wider "brownlash'' taking place against environmental issues.

Although too modest to remind his audience, Ehlrich's most recent book Betrayal of Science and Reason, subtitled How Anti-Environmental Rhetoric Threatens Our Future, details the concerted efforts being made by some sections of business, aided by a handful of scientific sceptics-for-hire, that have succeeded, for the time being, in milking the urgency and seriousness out of the environmental crisis.

However, Ehlrich only has to point to the warning made in 1992 by 100 nobel laureates that the hour is indeed late and time is running out to turn the situation around.

Ehlrich, Bing Professor of Population Studies and Professor of Biological Sciences at Standford is keen to quote what is accepted scientific fact and what is his own opinion. He says it is fact that there is a 10 per cent chance nothing will happen as a result of global warming and a 10 per cent chance it will lead to complete societal breakdown.

The truth is someone in between in the 80 per cent in the middle. No-one really knows yets given the uncertaintity of the modelling.

But what Ehlrich does know is that times change, attitudes change. All through the nineteen sixties,seventies and eighties the Soviet bloc and communism were thought to be immovable system that were expected to be around for a long time to come. Then they vanished in the blink of an eye. So too, must change come on the environmental front. When business incoroporates envirionmental values as second nature. The goal for us all, he tells us, is to hasten that day.


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*   View entire issue - print all of the articles!

*   Issue 34 contents

In this issue
Features
*  Interview: A Crack to the Skull
Rail, Tram and Bus Union state secretary Nick Lewocki took on the Carr Government�s radical rail refrom agenda and walked away a winner. He looks back on the week the trains stood still.
*
*  Economics: Green Backs and Dirty Dollars
Paul Ehlrich says the real culprit behind the environmental crisis isn't so much the huge numbers of people in the world or conspicuous over-consumption in the West but an economic system that confuses price with cost.
*
*  Unions: Tally Ho!
A landmark meat industry decision might not have the impact the reith cheer-squad hopes for.
*
*  History: The Western Express
West Australian historians are undertaking a project to chronicle that state's rich rail history.
*
*  Republic: The Referendum: A Spot of Reading
John Passant looks a the propaganda passing as information in the lead-up to the referendum.
*
*  Indigenous: Australia Snubs Nose at the UN
The United Nations General Assembly will be told that Australia has breached an international convention on racial discrimination that Malcolm Fraser�s Government ratified 24 years ago.
*
*  International: Desert Flashpoint
The United Nations has confirmed that demonstrations were suppressed in Western Sahara last month.
*
*  Review: Temper Democratic
Humphrey McQueen has been a fearless critic of received opinions across a range of subjects for many years, and as a consequence has been criticised or more often ignored in debates in Australia.
*
*  Satire: Tax Cuts Come in the Nick of Time for Struggling Packers
Welfare groups have called upon on the Federal Government to bring forward the date of proposed capital gains tax cuts.
*
*  Labour Review: What's New in the Information Centre
Read the latest issue of Labour Review, a resource for union officials and students.
*

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Columns
»  Guest Report
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»  Sport
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»  Trades Hall
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»  Piers Watch
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Letters to the editor
»  Off With Their Funds!
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»  At the Child Care Coalface
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»  Walsh Bay Development Backed
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