Eco Economy

AN ECO-ECONOMY
 
Introduction
 
Considering how the economy and the environment are approached in the United States, one would assume they are entirely separate entities operating under different principles.  In many people's minds, economic growth naturally comes at the expense of the environment, and protecting natural resources requires constraints on economic growth.
 
This zero-sumapproach to the economy and the environment makes it hard to envision a sustainable future.  Sustainability is often seen as an environmental concept but not an economic one.  In reality, a sustainable vision that does not take economic forces into account is doomed to fail.  A sustainable Santa Barbara County will require an economy that, rather than working against ecological principles, reinforcesthem and is founded upon them--an eco-economy.  In an eco-economy, sustainable practices will be common and profitable.
 
 
Goals
 
* Make Taxes and Subsidies Eco-Friendly
        Establish Eco-Industries
* Encourage Eco-Friendly Firms
        Unify the Efforts of Economists and Ecologists
 
 
Back to Sustainable Strategies

 
Make Taxes and Subsidies Eco-Friendly
 
Why doso many economic activities harm the environment?  It is not that environmental destruction is inherently profitable.  Nor are green practices necessarily too costly. It is simply a symptom of the way we view and manage our economy.
 
Governments profoundly influence the economy through a series of subsidies, many of which artificially reduce the costs of environmentally destructiveactivities.  Additionally, environmental costs are not often reflected in the prices of goods and services, meaning that society as a whole bears the burden of destructive activities rather than the individual producer or consumer.
 
Sustainability can be made more profitable by changing these price manipulations to favor sustainability.
 
                    Subsidy reform
Government policies oftensubsidize the consumption of natural resources rather than discourage it.  A 1997 Earth Institute report found that over $700 billion is spent by governments worldwide each year funding environmentally destructive activities (Brown).  As a result, prices often do not reflect the full cost of producing a good or providing a service.
Take, for example, automobile use.  Drivers in the U.S. pay only20-50 percent of the cost of parking, traffic services, and road construction and maintenance (de Moor and Calamai).  While effective transportation is important to economic development, the fact remains that Americans drive more than necessary, with negative results such as accidents and air pollution.  The massive subsidies on automobile travel make this possible.
 
This is not to say thatsubsidies are always bad.  The task, rather, is to shift subsidies so that they encourage conservation rather than consumption.  Subsidies should promote investment in renewable energy or tree planting, not pollution or waste.
 
                    Environmental taxes
 
Taxes, like subsidies, can be shifted to better support sustainability.  This has been done in many Europeancountries.  In Denmark, for example, income taxes have been lowered and replaced by higher taxes on the sale of water, fuel, coal and electricity (Brown).  Such shifts are engineered such that the government receives the same amount of revenue.  The only difference is that people are no longer penalized for making money, but instead for spending it on the consumption of important, finite resources.
 
Many destructiveenvironmental activities are not yet taxed at all.  If a tire manufacturer wants to calculate how much money he is going to make by selling one set of tires he will subtract his input costs (labor, overhead, raw materials, advertising, etc.) from the expected price of the tires.  A resource that is not included in the price of the tires, however, is the environmental impact of the production...