Saturday, November 12, 2016

Environmental Economics and President Trump: Market Forces are Not Enough (Video)

The world has changed with the election of Donald Trump. On January 20th the US will say goodbye to President Obama a champion of climate action. He will be replaced by Donald J Trump, a climate denier and champion of fossil fuels. Many including Leon Kaye have argued that market forces will somehow save us. While this is a hopeful message it is tragically naive. Market forces are indeed moving sustainability forward and this is especially true of energy.

More than a quarter of a million businesses have signed on to the American Sustainable Business Council to leverage market changes and policy changes to bring in the new green economy. Many businesses are showing energy leadership and investing massively in renewable energy.

It is true that sustainability has become a mainstream phenomenon, and it is entirely sensible to assume that Trump's energy and environment agenda will be countered by businesses and investors. Indeed we are seeing how market forces are driving clean energy forward. Renewable energy has seen tremendous growth and this is at the expense of fossil fuels, however, we must concede that this is not enough to keep us within safe limits.

More than a year before the election of Trump the INDC Synthesis Report indicated that the emissions cuts contained in the Paris Agreement were insufficient to keep us below the upper prescribed limit (2 degrees Celsius above preindustrial norms).

The sad fact remains that a Trump presidency will push us past irreversible tipping points.  On their own, market forces are grossly inadequate to secure the changes we need to see in the time that we have.

In this video Paul Andersen explains how economic models, like supply and demand, can be applied to environmental systems. The market forces will not protect environmental services until proper valuation and externalities are established. The wealth of a nation can be more accurately measured through the sustainability of the economic model.

Governments play a salient role in supporting and advancing the green economy. The massive subsidies provided to the fossil fuel industry make the uphill climb for renewables insurmountable. If we had decades, market forces alone may be sufficient to drive the transition. However, we do not have decades, we have a small and rapidly closing window.

The new administration, along with Republican control of both the House and the Senate, will Trump market forces.

No comments: