October 24, 2006
REPLACING THE BROKEN WINDOW SAVES MORE ON ENERGY THAN IT COSTS IN GLASS:
Never mind altruism: 'Saving the earth' can mean big bucks: Some $1 trillion in 'green' business opportunities await creative entrepreneurs, a report finds (Mark Rice-Oxley, 10/25/06, The Christian Science Monitor)
As the international community faces costs in the trillions to address climate change, businessmen are increasingly becoming aware that changing the world - its fuels, technologies, energy sources, and waste disposal practices - can be an opportunity as well as a cost.For small- and medium-sized British companies, it could mean $55 billion worth of business opportunities over the coming decade, according to a new report commissioned by oil giant Shell UK. And globally, the market could be worth $1 trillion over the next five years, the report found. Such conclusions challenge President Bush's assertion that adopting the Kyoto Protocol, which compels signatories to cut greenhouse gases, would seriously damage America's economy.
In fact, it's doubtful cutting emissions would do much for the environment, but it would give the economy a good goose. Posted by Orrin Judd at October 24, 2006 7:42 PM
It would do nothing of the sort. This is the classic economic fallacy of ignoring the opportunity cost. By the same reasoning, we should all tear down our houses forthwith - dubious environmental impact, but what a boon to the construction trades. Never mind that we just destroyed a trillion dollars of real wealth...But what would we have been building if we hadn't destroyed all our homes?
Posted by: steve at October 24, 2006 8:04 PMsteve is correct -- this is known (I think) in econ circles as the 'broken window fallacy'
Posted by: JonofAtlanta at October 24, 2006 8:09 PMYes, the point is that it isn't a fallacy. The mistake lies in the obviously inane belief that maintaining antiquated infrastructure isn't costing you anything. Those who believe in the broken window fallacy get stuck in the passivity trap.
Posted by: oj at October 24, 2006 8:23 PMIt also requires an incredibly artificial and constrained view of reality.
Economics is not a zero sum game.
Posted by: pepys at October 24, 2006 11:22 PM"Such conclusions challenge President Bush's assertion that adopting the Kyoto Protocol, which compels signatories to cut greenhouse gases, would seriously damage America's economy." Bush has been advocating what the Euros have just discovered: use alternate fuels, and new technologies to cut green house gases instead of abiding the Kyoto to "trade carbon emissions". He sensed a rat, ours is the only growing economy affected by Kyoto. To fulfill Kyoto, we'll have to buy "emissions" permits from dying economies, such as the Russians' and the Euros'. That means we work and emit carbon dioxide, they sit pretty and take our money just by selling their permits to us.
Btw, if Al Gore stops talking for ten seconds, the hot gas will decrease too.
BtwII, how do the French account for the carbon emissions of their burning cars?