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Yes, it’s true. The economics can’t escape the science.

November 20, 2013


Ross Gittins is one of Australia’s most respected writers on economics. In today’s Sydney Morning Herald, he’s addressed a column to his future grandchildren, regretting the foolishness of our responses to climate change. Here’s an excerpt:

You will find this hard to believe, but in the mid-teens, it was still common to think about ”the economy” in isolation from the natural environment which sustained it. Economists, business people and politicians had gone for two centuries largely ignoring the damage economic activity did to the environment.

The idea that, eventually, the environment would hit back and do great damage to the economy was one most people preferred not to think about. At the time, it was fashionable to bewail the lack of action to increase the economy’s productivity. Few people joined dots to realise the climate was in the process of dealing a blow to our productivity, one that would significantly reduce the next generation’s living standards.

At the time, we rationalised our selfishness – our willingness to avoid a tiny drop in our standard of living at the expense of a big drop in our offspring’s – by telling ourselves half-truths and untruths about the global nature of climate change.

We told ourselves there was nothing Australia could do by itself to affect climate change (true), that at the Copenhagen conference in 2009, countries had failed to reach a binding agreement on action to reduce emissions (true) and that the world’s two biggest polluters, China and the US, were doing nothing much to reduce their emissions.

We had no excuse for not knowing this was untrue because successive government reports told us the contrary. One we got just before the carbon tax was abolished, from the Climate Change Authority, said the two superpowers were stepping up their actions to reduce emissions. ”These measures could have a significant impact on global emissions reductions,” it concluded.

I recount this history to explain how my generation’s dereliction occurred, not to defend or justify it. We knew what we should have done; we chose not to do it. I never fell for any of these spurious arguments.

Did I ever doubt that climate change represented by far the greatest threat to Australia’s future economic prosperity? Never. Should I have said this more often, rather than chasing a thousand economic will-o’-the-wisps? Yes.

Gittin’s words should provide a model for all economists, business people and politicians. For too long, too many of them have argued that the economy must take precedence over the warnings of scientists.

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