Economics A Key Metric To Green Hopes

Economics are fast becoming the <i>lingua franca</i> of the environmental movement. And that's a good thing.

Kevin Ferguson, Contributor

November 10, 2008

2 Min Read

Economics are fast becoming the lingua franca of the environmental movement. And that's a good thing.That may sound disheartening to those, driven by, say, pure human agape, who want to clean up the environment because it's the right thing to do. But for government policy makers and business leaders the bottom line is, well, the bottom line.

So, green tech entrepreneurs speak in economic terms when courting potential clients. Emissions are put in terms of their economic impact; emission controls are put in terms of ROI. And investors are pouring huge sums of money into carbon information management (CIM) software, whose goal is to help businesses and governments run more efficiently by reducing their carbon drag. It's a good part of what motivates corporate giants Wal-Mart, 20th Century Fox Home Entertainment, Dell, Cisco, and IBM to become greener.

But the bottom line is they're becoming greener.

Besides, a common language lets organizations with different, though often overlapping, agendas communicate with each other. For example, it's what allows the World Bank and the World Health Organization to communicate. (In the case of the WHO and World Bank, common terms include Disability Adjusted Life Years (DALYs) and health-adjusted life expectancy (HALE), by which they assess the global burden of disease and decide what regions get priority interventions.)

And it's what will allow environmentalists and industrialists to communicate, particularly as economics, health, and the environment are necessarily found in the same discussion. The Organisation for Economic Co-Operation (OECD) clearly links the three in its just-released report, Costs of Inaction on Key Environmental Challenges:

"Countries today face numerous environmental policy challenges, such as climate change, air and water pollution, natural resource management, natural disasters and environment-related hazards. The costs of not responding to them can be considerable, in some cases representing a significant drag on OECD economies. ... Looking beyond these market-based costs, there are also costs of inaction associated with a wide range of intangibles (e.g. pain and suffering from being in ill-health) and various forms of ecosystem degradation. Although less visible, these non-market costs are likely to be important."

A little cold and calculating? (DALYs are calculated in a few instances of the report.) Perhaps. And perhaps that's what is needed to save the environment.

TOMORROW: A new CIM firm makes its debut.

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