Plan B 3.0: Mobilizing to Save Civilization

Building the Green Economy, Earth Policy Institute, Quipu Economic Forum ::

BOOK REVIEW & INTRODUCTION TO ONGOING HOT SPRING DISCUSSION

Ecologist and researcher Lester Brown, founder and president of the Earth Policy Institute, has issued the 3rd installment of his ‘Plan B’ books —Plan B 3.0: Mobilizing to Save Civilization (2008)—, which lay out the most vital research underlying and the most optimal means of meeting the need to transition to a sustainable economy that not only works in harmony with natural system, but also helps to reverse the excesses of the existing industrial model.

The alterations to the Earth’s climate that are resulting from centuries of burning fossil fuels, rich in carbon and which release unnatural amounts of carbon-dioxide into the environment, are presenting current and future costs that have not been integrated into pricing models:

When Nicholas Stern, former chief economist at the World Bank, released his ground-breaking study in late 2006 on the future costs of climate change, he talked about a massive market failure. He was referring to the failure of the market to incorporate the climate change costs of burning fossil fuels. The costs, he said, would be measured in the trillions of dollars. The difference between the market prices for fossil fuels and the prices that also incorporate their environmental costs to society are huge.

The roots of our current dilemma lie in the enormous growth of the human enterprise over the last century. Since 1900, the world economy has expanded 20-fold and world population has increased fourfold. Although there were places in 1900 where local demand exceeded the capacity of natural systems, this was not a global issue. There was some deforestation, but overpumping of water was virtually unheard of, overfishing was rare, and carbon emissions were so low that there was noserious effect on climate. The indirect costs of these early excesses were negligible.

Now with the economy as large as it is, the indirect costs of burning coal—the costs of air pollution, acid rain, devastated ecosystems, and climate change—can exceed the direct costs, those of mining the coal and transporting it to the power plant. As a result of neglecting to account for these indirect costs, themarket is undervaluing many goods and services, creating economic distortions.

As economic decisionmakers—whether consumers, corporate planners, government policymakers, or investment bankers—we all depend on the market for information to guide us. In order for markets to work and economic actors to make sound decisions, the markets must give us good information, including the full cost of the products we buy. But the market is giving us bad information, and as a result we are making bad decisions—so bad that they are threatening civilization.

The market is in many ways an incredible institution. It allocates resources with an efficiency that no central planning body can match and it easily balances supply and demand. The market has some fundamental weaknesses, however. It does not incorporate into prices the indirect costs of producing goods. It does not value nature’s services properly. And it does not respect the sustainable yield thresholds of natural systems. It also favors the near term over the long term, showing little concern forfuture generations.

A major factor in the challenge now facing human civilization is how exactly to continue to exploit the benefits of a market model, while we make sweeping industrial transitions away from fossil fuels, and ‘program’ the market to learn to account for these vital, and incomparably valuable, considerations. Lester Brown’s latest book is, as is custom with his work, a relentless and committed examination of the problem in its most vital detail, coupled with real solutions and a strategy for overcoming the global challenge of moving to a climate-safe economy.

• Earth Policy Institute: Eco-Economy Updates (plus data & translation links)
• Earth Policy Institute: Outgrowing the Earth: The Food Security Challenge in an Age of Falling Water Tables and Rising Temperatures
• Earth Policy Institute: The Earth Policy Reader
• Sentido.tv: Informes de Eco-economía, en español
• Sentido.tv: Lester Brown presents Plan B 2.0 at Google (video)

jr3o @ February 8, 2008