Every time a group – whether economists, government bureaucrats or business people – sits down to decide how to encourage the planet toward sustainable progress, they end up calling for “full-cost pricing”. This means that the price we pay should reflect a good’s or a service’s full cost – including social and environmental costs. The price of petrol should include the cost of sending armies to the Middle East. The price of coal-fired electricity should include the costs of the premature deaths caused by its pollution – and its mining.
Including such costs would not only better reflect reality (an alleged goal of economics), but also make renewable energy much more cost-effective than fossil fuels. (This approach is also called “internalizing externalities” – the mild, technical word “externalities” referring to things like extinctions and environmental destruction.)
Sustainable human progress also requires tax shifts: that is, we stop taxing things we like, such as jobs and investments in new technologies, and start taxing things we don’t, such as waste and pollution. Such taxes also encourage companies to keep improving, which laws requiring minimum standards do not.
If these steps are so logical, why haven’t they been taken? Because powerful industries oppose them; because government bureaucrats do not like change; and because we the voters have not demanded them.
