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The real green is in our wallets

Justin Rowlatt | 16:43 UK time, Tuesday, 24 February 2009

Muskegon, Michigan - How can we wean ourselves off our addiction to the easy energy fix of fossil fuels? That is the cliff-hanging, planet-saving question I left at the end of the last blog.


At our Muskegon climate change meeting I asked the crowd what would persuade them to stop using so much energy.

A single answer came back loud and clear. It is the same one given by most of the great economists, campaigners and politicians who have studied how to solve global warming.

The answer is green, but not green in the environmental sense of the word. In Muskegon money is the answer, it all comes down to good old greenback dollars, plain and simple.

Everyone at the meeting seemed to agree that raising the price would stop them using so much fossil fuel energy. They did not necessarily like the idea of prices rising, but they were certain that it would change their behaviour.

That is because just a couple of months ago fuel prices were more than twice what they are today, $4 a gallon instead of $1.80. That had made everyone at the meeting think more carefully about the journeys they made, how hot their houses were, how much power they used.

The idea of depending on markets to make decisions has become very unfashionable in recent months, but if the men and women at our meeting in Muskegon are right it may just be that the market will provide the mechanism which will help us save the world from global warming.

The best way I have seen of thinking about it is in Thomas Friedman's book on how to tackle global warming, Hot, Flat and Crowded. He quotes the environmentalist Lester Brown who compares the way we use fossil fuels with a kind of fraudulent accounting.

As a society, says Brown, "we have been behaving just like Enron, the rogue energy giant, at the height of its folly". We rack up stunning profits and GDP numbers each year and they look great on paper "because we've been hiding some of the costs off the books".

What he believes is that mankind has been cooking the books on a monumental scale. The costs he's talking about are the potentially catastrophic impacts of carbon dioxide and other greenhouse gases on the atmosphere.

It is true that virtually everywhere companies and individuals can generate as much carbon dioxide as they want and emit it into the atmosphere absolutely free of charge. You can then argue that the cost is being picked up by the Earth itself, as scientists have been discovering over the last couple of decades.

So, if the people at our Muskegon meeting are right, what is needed is some kind of mechanism by which a price can be set for the right to emit carbon dioxide into the atmosphere.

President Obama believes that is the way forward and so does Arnold Schwarzenegger. Both have argued that we need to find a way of ensuring that people who pollute the atmosphere with carbon dioxide pay for the privilege.


It is a radical position. If you set a price for carbon you begin to force businesses to take account of those costs they have been keeping off the books. The idea is that the carbon price would be gradually increased over the next couple of decades until it reflects the real cost of those emissions on the environment.

Then we as a species wouldn't be guilty of false accounting anymore.

That's the argument anyway. But is it right?

Do you agree that the best way to green the earth is to use the power of the green in our wallets, or do you think there are other ways of persuading us all to cut down on greenhouse gas emissions?

Tell me what you think. These are, after all, some of the most important questions on earth so you should have a say.


  • Comment number 1.

    I think this is the only thing that will work in the U.S. We desperately need to help people understand the real cost of all kinds of pollution so that they can be 'internalized' (include the cost of pollution in the product which is the cause of it) instead of making society as a whole pay. It's very like our cigarette taxes which attempt to make people who smoke pay the added costs which their habit places on the health-care system.
    If gasoline taxes were high enough to cover the cost to society for the health and environmental effects caused by burning the gas, people would be willing to pay a little extra for a car that gets better mileage.
    The real challenge will be to get people to agree on what the price should be.

  • Comment number 2.

    I was very impressed by the way that people who were not 'green' and would have cared little for the environment and had said in the past that 'There is no way I could give up flying / my car / patio heater' suddenly did for a time change their tune when oil was $ 140 a barrel.

    We CAN change - we just have too many handy excuses not to..

  • Comment number 3.

    I think that people who pollute the atmosphere with carbon dioxide should pay for that privilege, but as there are numerous ways to do this we should be careful. I don't agree with carbon credit schemes as they don't tackle the heart of the problem and conduce to the marketization of the environment. Instead, governments should perhaps increase taxes of those who pollute and of oil and those revenues should be use to invest in greener technologies.

  • Comment number 4.

    This is about Costs. If health and environmental costs are not accounted for and included in legal financial reporting, and shareholders are still requiring greater profits, then either a special "head in a bucket of sand" clause should fast become law (also to be known as the "ostrich clause") or, alternatively it could be known as 'Fraud'.

    A classic example is metal ore mining . When those effects of mining permitted under the 1872 mining law, and culminating in routine and massive environmental degradation by the access, process, unwanted heavy metals and waste chemicals, the insurance industry, which having been increasingly vulnerable (unprofitable) to increasingly vast unsustainable claims, came up with the "pollution exclusion clause" in the early Eighties, leaving the way clear for the armies of very well funded mining company attorneys to protect their employers' 'rights' and reduced responsibilities, thus requiring the public to fight for public money (superfunding) cleanups to be approved and paid for after the event.

    This process is the creation of a form of false premise, to which the public can only react, while the industries fund the prevention of change to this, aka lobbying.

    Another example is airborne vehicle pollution in cities resulting in risks and costs for children and their parents through causing and aggravating asthma, in that rather than require clean or no vehicles around children we produce 'better' asthma relief products. What are the True Costs born by the children?

    Meanwhile, safe disposal of radioactive waste is a fatuous notion, as the only precedent we have in less than a century is that there is no such thing known nor achieved, and although nuclear energy may have been generated and sold for decades, the income received has never included and can never include realistic provision for safe disposal or covering the true costs of the effects on health. Who writes credible business plans to acommodate half-life? Cancer fallout as roulette, transportation, protection, storage, treatment of illnesses, ie all costs?

    So "green" certainly means new and old engineering based technologies, attitudes and effort towards way more efficiency and much improvement to construction; and emerges with realistic full-on scrutiny of the True Costs.

    Having read this last terminology in fitting context increasingly often in the Financial Times (and particularly from the pen of Fiona Harvey in London) clearly 'True Cost Accounting' is becoming established and is well applied to this BBC Ethical Man debate.

    We are all taking the same crash course in appreciating (and suffering) the ingenious false substance that constitutes 'Fraud', perhaps we are fast being forced into learning to recognize 'Fraud' in some more of its evidently numerous and endlessly elusive manifestations. Can we call it for what it is?

    Just as we really need to acknowledge and promote the 'alternatives' as the sustainable mainstream and the current as the falsely accounted for, can we clear up matters such as the less frequent occurrence and opportunities for Ethical Investments and instead list and draw scrutiny of those that by comparison constitute unethical investments as defined by "Costs not Met"?

    Seems as if the time is right, strangely, that we demand the alliance of the now drastically more transparent insurance industries, to identify and define what really is and is not insurable by way of commercial practice, due to their relentless expertise in searching for 'uninsurable' preconditions, and to overtly 'Cost' what is insurable.

    How we allow companies to function as if they are not made up of people affecting people is in itself another creation of anti-social Fraud.

  • Comment number 5.

    Ah the truth at last it's so refreshing!

  • Comment number 6.

    At the moment prizes on the carbon market are down and it is cheaper to pollute again, also in Europe. Of course this reflects the reduced emissions due to less economic activity but the idea that you can pollute for free at all is a bad one. The planet is adversely effected by every single molecule of CO2 and other green house gasses. And it is going to take a long time to get rid of them all (hundred or even thousands of years). So the system with respect to CO2 should be partly taxes and partly credits bought on the open market. There is no free lunch.

  • Comment number 7.

    I'm not going to be a "climate change" denier, but I don't want some artificial tax for some unquantified "CO2 cost" levied on my gas--certainly not in this economy, and certainly not with viable alternatives to switch to.

    The US is not Europe, it's a driving-centric society and economy. Driving is simply a fact of life. Most people here did not dramatically alter their driving habits to accomodate the higher price of oil, but rather just tightened the belt instead.

    What the higher prices of gas did do was make people look for more gas-economical cars. Most people found that a new car would not pay for itself in gas savings if they were not already looking to buy. In this economy buying new cars for gas savings is even less attractive, as the car will only save money over the long term. Public transportation is also not heavily subsidized, or deployed as it is in Europe. Nor can we simply turn to diesel engines since the emission standards are higher in the US than in Europe, driving up costs.

    The bottom line: don't tear down the current regime without having something to replace it with.

  • Comment number 8.

    It´s very sad that we care more about our pockets than about the health of the planet. But, yes, most people are like kids and will behave better if they are 'punished' when they cause harm. I think this can be used to avoid higher damage in the short run, but in the long run, what really works is to raise awareness and teach people how to take good care of our 'home'. I hope this happens soon, and before we can go to other planets and make a mess there too.

  • Comment number 9.

    If you are going to arbitrarily increase the price of petrol and household energy then fine, providing there are concessions for those who cannot manage without. I am disabled and need my car for short trips where others could walk, and longer trips where others could take public transport.

    Also, although elderly people get a heating allowance in cold weather, disabled people do not. A colder house can lead to increased pain and/or reduced mobility.

    Heating and petrol costs are already quite high enough for those who really need them!

  • Comment number 10.

    We Americans love rewards and the bonus.
    Incentives by insurance companies to lower our deductable to safe drivers, credit cards companies, part store and airlines all lure us with rewards. Why? Because it works.
    By lowering my carbon footprint I should get carbon credits I can sell. Show me how I can make or save money and global warming will take second place in my motivations to cut carbon. Make Zero Energy homes that are affordable and I would be happy to move into one so I can keep all that utility bill money. If it is the lure of the gold bar that got us into this mess then it doesnt take to much to figure that it will be the lure of the gold bar that can get us out of this mess.

  • Comment number 11.

    I agree that our tendency t externalize the costs of environmental consequences is a huge problem with our current environmental policies (and teh lack thereof). Correcting the price of oil, coal and other energy sources so that their *true* cost is accounted for is a necessary step that we've taken far too long in making.

    FWB and Bionic Badger make good points, though, that simply yanking the price up won't 'solve' the issue. We need definitive, but gradual change, with the increased revenue going to fund some subsidies for people whose belts are already tightened (if they haven't been sold off). We also need to fund more alternative energy sources, and having a gradual shift will allow people to make good long term decisions.

    Carbon credits on an individual scale could be interesting - I dislike them internationally, because I don't feel that the proposed systems do enough to guard against western countries' exploitation of the system at the expense of more developing nations. However, individuals don't have the same need to build infrastructure that developing nations do. I think it has potential.

  • Comment number 12.

    And you ask "what possible reason could the left have for making this global warming thing up?" It will wind up being money and of course present a chance for the government to save us all! I will not live my life based on fear of unproven science.

    I'm sure you also have an excuse for the unusually cold winter that we just had...

  • Comment number 13.

    The whole idea of global warming was thought up in the seventies just after the global cooling myth was debunked.

    Read the The First Global Revolution and research do not believe all the propoganda from these new world order types.

    This is one of their quotes.

    "The common enemy of humanity is man.
    In searching for a new enemy to unite us, we came up
    with the idea that pollution, the threat of global warming,
    water shortages, famine and the like would fit the bill. All these
    dangers are caused by human intervention, and it is only through
    changed attitudes and behavior that they can be overcome.
    The real enemy then, is humanity itself."

    Club of Rome
    premier environmental think-tank
    consultants to the United Nation.

    How many you of know last year the US government dumped 60000 tons of nerve gas into the pacific not many i bet.Now thats a real enviromental concern not this global warming nonsense or is it climate change. I like to call it "the weather".

  • Comment number 14.

    It all makes so much sense. Internationally, it must be agreed that each national state will be charged x ounces of gold for every tonne of CO2 it emits. The gold raised will then be redistributed to each nation state according to its population count (lagged by about 25 years to remove any incentive to population growth). x is determined every ten years or so by asking each nation state what it should be and taking the population-adjusted median.

  • Comment number 15.

    And so your answer, once again, to 'beating' climate change is effectively higher taxation.

    There really is nothing fresh or realistic (other than Tax) to offer, is there?

    When will you wake up and realise:

    1) Climate change cannot be 'beaten'. We will have to live with it and adapt.

    2) Cynical taxation is not the answer. Incentivise people to be green instead.

    Technology will provide us with all the solutions, in time. The market will incentivise people (when the gas returns to $4/gal). The tide already turned against our over-reliance on oil 35 years ago.

  • Comment number 16.

    So it's okay to waste resources if you happen to own the oil wells and so can afford to. Is that what you're saying?
    Or is it that poor people like ambulance drivers or nursery nurses don't work hard enough to be able to afford to both heat their houses and run a car?
    Luckily there are more 'poor' in the world than 'rich' otherwise your rationing by social worth ideas just wouldn't work; how clever of the market to ensure that there can only ever be a few winners compared to many losers.

  • Comment number 17.

    After working on a PhD on climate change, I've had to accept that while the market is an unsatisfactory way of regulating carbon emissions, it is the only one that will work. But there must be a fixed supply against which the market can match demand, so that it can set prices.

    So it has to know how many tons of permits are available in the world market, and needs an assurance that no more will be issued. This requires a global, enforceable emissions ceiling. Only a Phase 2 of the Kyoto Protocol or a similar global agreement can do this.

    Also, the US needs to be on board. The danger here is that we'll do what we did in 1997 - weaken the treaty to get it on board, then have Congress not ratify it anyway. This would be the worst possible outcome.

    Better to think outside the box, and have a Kyoto 2 that does not involve the US, but allows Kyoto-compliant credits to be traded against those issued on US markets (and these are developing - the Regional Greenhouse Gas Initiative in New England, the activities of the California Air Resources Board, etc.) We'd then need only a very basic agreement between the US and the Kyoto countries on certification and the number of tons emitted. After all, the US actually pioneered the first emissions market (in SO2, in the 1990s). I think a looser link between the US and Kyoto could work.

  • Comment number 18.

    Hmmm interesting. Schwarzy is green now is he?

    How many Hummers does he have again?

    Who cares that he has adapted one to run on hydrogen and one to run on bio fuel. What do the other 4 run on? And is he aware of how much embodied carbon there is in one of those planet destroying monsters that he owns 6?

    Typical politician. Do as I say, not as I do.

    When oh when will we wake up and see the future we have destroyed for our children?

    As the article suggests - only when we have to pay more.

    How terribly shallow mankind is.

  • Comment number 19.

    Ah ha!

    That by putting up fuel prices we will use less is an undeniable fact.

    What surprises me is that we seem to be largely unaware, judging by the posts on this blog, of the fact that we are at (or about at) the peak of world oil production.

    The evidence is clear and all around us. From Suadi Arabia's inability to pump the 14.4m barrels per day they said they would, from the head of BP capital's confirmation of it, Colin Campbel's seminal work in this area, Hubbert's predictions and the fact that current world demand runs at approximately 87m barrels perday against a supply of 84 m barrels per day..

    So the politicians are "suggesting" that we put up the prices for oil are they? Well those prices are subject, as is any commodity, to the laws of supply and demand. And most of the developed world has passed the peak of their domestic production and importers of oil energy. America imports 80% of it's requirement - a fact that dictates it's often deeply repellent foriegn policies...

    These prices will follow the supply/demand rules, perforce, and the price will rise as we go forward. Nobody wants to discuss peak oil as it is called because of it's effect on investor confidence in the already stuggling markets. This is due to the simple fact that there is not a single business model that doesn't make the tacit assumption that oil prices will continue to remain at or very near to present levels for the forseeable future.

    This fallacy is even more important to correct than the fact, as mentioned in the article, that we have ignored the overall cost to the planet and our natural envoronment, Enron-like, in the balance sheets under present accounting rules.

    Prices will rise, the market is not yet ready to accept the fact at this critical time of recession, therefore peak oil is being dressed in climate change clothes to sweeten the pill. Wake up and smell the coffee guys. If in the future, you can find a way to afford it, that is.

    In the US, starbucks coffee is roughly $50 a gallon while petrol is about $2. How much will that coffee cost when the price of oil rises to say $10? Think about it.

    That we have to wean ourselves off this ridiculous addiction to oil is clear. Prices will do it for us but prices are going to rise anyway due to the simple fact that oil will become scarcer and scarcer going forward. Therfore we need to get our priorities straight and get away from our dependance on oil and natural gas buring as fast as we can - now.

    Consider agriculture and food for just a second and you will see that from the fertilisers distributed on the fields by oil powered machines, from the massive impact in soil degradation caused by fertiliser use in intensive farming operations, to the distribution and logistics of the resulting "food" to our supermarket shelves, we have a problem. That problem is that unless we make fundamental and rar reaching changes to the way we feed the planet, oil prices rising equates to a direct increase in the price of food (Oh - and EVERYTHING else, by the way). Somebody needs to think about the deep impact this will have on our societies.

    Permaculture and direct encouragement for local food production is not a fad, it is a practical necessity, needing implemention now, for this oil price rise policy (enevitability) not to cause horribly unforseen consequences at this time of global recession. Where is our government on this issue? This effects all of us.

  • Comment number 20.

    To begin with, those who believe the dire warnings of today's establishment press should know, that for more than 100 years, journalists have quoted scientists predicting the destruction of civilization by, in alternation, either runaway heat or a new Ice Age."

    Believe it or not, over the last century America's major media have predicted an impending global climate crisis four different times – each prediction warning that entire countries would be wiped out or that lower crop yields would mean "billions will die." In 1895, the panic was over an imminent ice age. Later, in the late 1920s, when the earth’s surface warmed less than half a degree, the media jumped on a new threat – global warming, which continued into the late 1950s. Then in 1975, the New York Times' headline blared, "A Major Cooling Widely Considered to Be Inevitable." Then in 1981 it was back to global warming, with the Times quoting seven government atmospheric scientists who predicted global warming of an "almost unprecedented magnitude."

    Today, to cover all their bases, much of the press is changing its terminology from "global warming" to "climate change" or "climate catastrophe." That way they're covered either way: If the world gets colder, global warming is still at fault.

    From politicians and scientists to big corporations and the United Nations – benefit from instilling fear into billions of human beings over the unproven theory of man-made global warming. Indeed, just three weeks after the U.N. ratcheted up international fears over global warming, a panel of 18 scientists from 11 countries has now reported to the U.N. that the only thing that can stop catastrophic climate change is a global tax – on greenhouse gas emissions.

    That's right. Global problems, real or conjured up, require global governmental solutions. Environmentalism is nothing less than the global elitists' replacement ideology for communism/socialism. With communism largely discredited today – after all, 100-150 million people died at the hands of communist "visionaries" during the last century – elitists who desire to rule other people's lives have gravitated to an even more powerful ideology. More powerful because it seems to trump all other considerations, as it claims the very survival of life on earth is dependent on implementing its agenda.

    Thus, while scientists and climatologists who dare to question the rigid orthodoxy of man-made catastrophic global warming are openly ridiculed and threatened with decertification, the movement for global governance, complete with global taxation, is moving into the fast lane.

  • Comment number 21.

    I'm in favor of making it costlier for companies who pollute. When corporations see taking environmentally beneficial steps as a means to avoid a carbon tax, fees, etc..we will be speaking to their bottom line and placing the bill for climate change in there lap and not giving it to future generations.

    When what's good for business is good for the planet we'll be in the right place. I recommend Paul Hawken's "The Ecology of Commerce" for more on balancing commerce and environmental.


  • Comment number 22.

    First of all, I would like to say to all those that posted on here and other sites that CO2 is bad and needs to be completely removed from our atmosphere--well, that is just false. CO2 is a GOOD thing in our atmosphere, at least in moderation, and has ALWAYS been in our atmosphere. These last 400 to 1000 years here on earth have seen the least amount of CO2 the earth has ever known. Beyond 1000 years ago, the earth had over 10,000 times the amount of CO2 we currently have, and yet, the earth wasn't in a "globally heated" stage, with high oceans and no coastlines.

    As a matter of 'FACT' (and I don't use that word lightly), the earth's atmosphere NEEDS CO2 to regulate the suns harmful effect on our planet, for without CO2, our planet would be too hot, unable to sustain life--any kind of life. So, although I disagree with production companies being allowed to pollute our environment freely, I also do not agree with a CO2 tax without having a complete understanding from the scientific and physics community of what the earth's NATURAL CO2 levels should be BEFORE we start taxing.

    In otherwords, we don't know what the Earth's natural CO2 levels should be, so how can we tax CO2 production when the earth has seen much, much higher CO2 levels before the advent of machinery?

  • Comment number 23.

    I agree that raising the prices of 'un-green' things would work to reduce their consumption, but I disapprove of the idea, not least during this recession. This would have a negative impact on business (even if good for the world in the long term) at a time when business needs to be encouraged to be stronger.

    And this smacks of the idea of raising the price of unhealthy food to get people to eat better - an idea that I vehemently oppose, although (as with this case) I recognize that it stands a fair chance of working. Note, I am stingy/thrifty and, compared to the average American, rather healthy - I thus want cheap food.

    For food, it should boil down to responsibility in a libertarian sense. Food should be set by the market, and it is up to individuals to eat properly. If they get fat, clogged arteries, cirrhosis of the liver, etc. the government (and taxpayer) should not be as inclined to help them out as if they had eaten healthier but were unfortunate enough to be afflict by those same diseases.

    For climate change, it is more difficult, because others irresponsible behavior doesn't hurt only them. So maybe raising prices on un-green gasoline (Br. English, petrol), coal, etc. - and then pumping those extra taxes 100% into subsidizing cheaper-than-market green substitutes, until those green alternatives are cheaper than the old energy sources. But this should not be attempted - at least the raising gasoline/coal prices/carbon taxes until this economic recession at least bottoms out, if until the economy is on the rebound.

  • Comment number 24.

    Dear Justin, I so enjoyed your blog and comments about Muskegon. I am originally from Muskegon, Michigan and I attribute my acute sensibilities toward the environment to the budding grass roots environmentalism of the sixties and seventies there when I was growing up. I feel because of the historical continuity of communities and families in Muskegon, people have a stake in -- feel a strong connection to -- the surrounding environment and take action. The richness of the aquaculture in Michigan inspires stewardship. It's refreshing. As for me, I left the area years ago to attend school in California and remain here. I have for the last five years worked for an international environmental organization devoted solely to preserving the world's islands: their threatened ecosystems, endangered species and historic cultures. We have a handful of international affiliates, one of which is in the UK. Please let me know if you would be interested in meeting with the principals in London to learn more about us. We are making great progress globally with our programs such as carbon offset, reforestation of mangroves and other indigenous trees, and coral reef restoration. Mangroves and coral reefs are now more endangered than the great rainforests of the planet. I invite you to visit for more information.


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