This post is my latest article for my local paper, The Village Observer.
The market isn’t capable of ensuring we don’t stuff the environment and thereby stuff the economy.
Last month SMH economics editor Ross Gittins (SMH 17/7/15) gave an incisive view of the failure of our economy in dealing with current environmental challenges and ‘ecological sustainability’.
Referencing the Wentworth Group of Concerned Scientists (WGCS) paper on Using Markets to Conserve Natural Capital, Gittins targeted Australia’s relatively high contributions to global greenhouse gas emissions, and related issues about ‘protecting and restoring our degraded land, water systems and native flora and fauna’.
As our infrastructure and supply systems strain to meet population demands in urban and regional areas, there are environmental costs from economic activity that are not borne by producers and consumers. If there is no market value placed on greenhouse gas output from industries, on retaining a stable climate system, or on preserving the ecosystems that underpin our productive lands, impacts from “market failure” will continue to rise where satisfactory community outcomes are not realised by economic forces.
While there are strong ties between the economy and the environment, it is hard to see the market forces taking responsibility for the environment. But perhaps market forces might be of service to the environment with social (ie. community-wide) costs of environmental damage being absorbed into the private costs borne by producers and consumers. Such was the rationale of a hybrid carbon tax/emissions trading scheme, which put a price on greenhouse gas emissions under the Gillard government’s policy.
The WGCS paper accepted this logic and proposed four market-oriented interventions to reduce future damage to the nation’s “environmental assets” and to fix past damage.
1 ‘Duty of Care laws’ for all landowners, public or private, to help reduce damage to land and water resources in which we all have common interest, with codes of practice for greater certainty about rights and obligations. This would reinforce our community rights to a clean and sustainable environment, with limits to individuals having perceived rights over their private property.
2 Reduce carbon emissions with Federal policies promoting ‘carbon farming’ as part of Capital Action, helping remove carbon dioxide from the atmosphere and converting it to plant material or soil organic matter while assisting restoration of degraded land.
3 Tax system reform to promote conservation and repair of the natural environment, and not encourage unsustainable practices. Instead of fuel exemptions for off-road vehicles in the mining and agricultural sectors, a broad-base land tax could help support land holders including farmers and Indigenous communities, with incentives to restore and maintain the health of our shared environmental assets.
This idea is also raised in Chapter 8 of Grattan Institute’s City Limits – How we can fix our cities and suggests a fairly applied land or property tax could see removal of stamp duty, which discriminates against those who need to move home, and would make it a bit easier for people to relocate to where their needs or employment dictates.
‘Subsidising or providing economic incentives for fossil fuels makes no sense because it results in increased costs to the environment, costs we will all have to bear sooner or later.’
4 Sustainable farming practices, where farmers should be rewarded to better manage their property and our land, with flow on benefits to suppliers, retailers and consumers. Our shared environmental assets – including soil, native vegetation, native fauna and water resources can then be sustained in a state that contributes to the overall health and resilience of the hinterland.
Our environmental assets are not all in the country or on farms however, and there are challenges a plenty in our own backyards as the closing page of City Limits highlights… ‘Perhaps the most important thing we can do as residents of cities is to be open to change. … Cities help Australia navigate the great shift from agricultural economy to an industrial one that helped to keep us one of the wealthiest nations in the world. … In the rear-view mirror, change often turns out to have been a lot easier than we feared at the time.’
Gittins’ article concluded: ‘All is very sensible stuff. Now we just need a sensible government.’
But making sense of the past few weeks of federal fiasco must leave most of us wondering how this is possible. And comparing our Lane Cove backyard to other urban places does give a certain urgency to the need for collective responsibility, showing how much natural environment we have to enjoy – a legacy that must be taken seriously!