Good News on the Economy!

In an NPR piece last week about the Japanese tsunami, somebody said that the destruction boded well for economic recovery. All that cleanup and reconstruction, you see. Perhaps some American firms can even get in on the action.

Well, yes – following the insane logic of industrial economies, disasters are good business. That’s because they can lead to what we call “growth.” Which just means money spent.

Plenty of money has been and continues to get spent, after all, cleaning up after Hurricane Karina, BP’s Deepwater Horizon oil spill, and reclaiming countless streams in my neck of the woods, Pennsylvania, from decades of acid seepage from coal mines.

Someone once said that economically speaking, the ideal citizen in our society would be a terminal cancer patient who gets in a car wreck on the way to his divorce hearing.

Speaking of car wrecks, much of this problem is tied up with the extractive industries – any kind of mining, but perhaps especially fossil-fuel extraction.

For instance, it counts as a plus for the economy when we spend money to hunt for oil, to drill for it, to transport and refine it and sell it as gasoline – but it doesn’t count as a negative for the economy when that gasoline’s burned up in someone’s V-6, and lost forever.

On this count, our economy is like a shoe store that keeps selling shoes but never subtracts the cost of buying them.

The loss of nonrenewable resources isn’t the only problem, of course. The other thing we don’t subtract from “growth” is the environmental damage caused by everything we do. Dig for coal, you pollute streams — but no economist figures in the loss of the stream ecosystem. Burn the coal, you make people sick, but nobody factors in those losses – in fact, they’re counted as MORE GAINS, because … medical expenditures are economic “growth,” too!

I just read this today, in Devra Davis’ fine 2002 book “When Smoke Ran Like Water”: “The effect on the environment has to be factored into the economic decisions we make every day. We need to find some way to make the price of turning on your lights and getting to and from our jobs reflect the full and real health and economic costs of those choices.”

The idea isn’t new, of course. People have been saying for years that “externalities” like pollution need to be toted up and internalized in our economic bookkeeping.

But remember coal’s other effect, besides poisoned streams and hacking coughs: Burning coal is the biggest single source of carbon dioxide, which is the single biggest greenhouse gas. A watered-down attempt to make us take responsibility for that cost, the “cap-and-trade” provision of the energy and climate bill, was proposed in Congress last year. It never made it out of the Senate.

Weak as it was, that bill was probably the best chance the U.S. is going to have to address climate change for years. And of course we don’t have years. And so now we’re courting the biggest series of disasters of all – coastal flooding, drought, famines.

But I’m sure someone will figure out how to make money off it all.

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