Money Can’t Buy You Climate

Here’s a simple thought experiment.

If you can see a flaw in it, you’re welcome to contradict me.

Money is a system of debt, in other words, obligations.

Someone is owed money on the basis of their obligation to work. Another person is given money on the basis of their bringing to market raw commodities. Yet another is required to make interest payments on a loan taken out to support an enterprise.

Everything has come to have its price : from the use of land owned by someone else, to the trading of fuel to transport and process raw commodities, to the cost of a manufactured product.

Money is a machine to generate obligations; “incentives” that are efficient in pulling the products of labour, photosynthesis and animal rearing into the global trading system.

As human labour is expensive, and trees for the furnace grow but slowly, the money system has drawn progressively more on the use of hydrocarbons, and coal, burned for the energy they supply, the “labour” that they equate to.

The flow of money in the globalised economy imples emissions of Carbon Dioxide into the atmosphere, from the processes of burning Fossil Fuels, to taking down old trees to make way for oil and food crops, to impoverishment of soils.

Now we have become so dependent on Carbon Emissions, that to fulfil any obligations in the money system implies Carbon Emissions.

Even as the pace of the development of Renewable and Sustainable Energies quickens, there are still increasing Carbon Emissions to air, as fresh obligations from the money system outpace the growth of Green Energy.

The net effect is this : to fulfil money obligations, you must emit Carbon : your Carbon Emissions obligations.

The question is this : how can these money-sourced Carbon obligations be used to stop Carbon emissions ?

Surely they cannot.

Even if you create a price differential between Carbon Emissions activities and Green Energy activities, the money system obligations exceed the Green Energy capacity.

Even if you place a price on Carbon you cannot accelerate the growth and uptake of Green Energy.

This is because those who need to fulfil their money obligations, who use Carbon to fulfil their money obligations, will find it cheaper to pay for Carbon than pay for new Green Energy installations.

(They can always pass their Carbon costs onto their customers, anyway.)

And besides all that, installing new Green Energy requires the use of hydrocarbon and coal energy, which will cost more now that Carbon has a price.

And so it becomes clear that money is a system to oblige you to emit Carbon, and that charging for Carbon merely means that more emissions will be made.

Money can’t buy you Climate.

And there’s worse : Climate Change is making it harder for people to fulfil their money-based obligations : as crops are destroyed, animals infected, rainfall changes, places become too hot for work.

Climate Change is eroding the value of money, which means that inflation will come, and so it will be even harder for money to buy you Climate stability.

You can expect a continuing low Carbon price and a poor response to that Carbon price signal.

Money can’t buy you Climate Control.

2 thoughts on “Money Can’t Buy You Climate”

  1. The weakness in this argument is the carbon price and what is done with the money generated by a carbon price. If the price of carbon is high enough, money obligations which require lots of energy will move toward lower carbon and higher efficiency energy systems. In a carbon tax system, the price can be set to encourage specific ‘green energy’ sources, depending on their lifetime carbon cost. The money collected can be returned to consumers to offset the higher energy costs or to subsidize investments in energy efficiency, currently the best place to reduce carbon emissions per unit GDP.

    Cap and trade is more complicated. Money obligations that require lots of energy will have to purchase credits, but the connection between the money received by the seller, the reduction of emissions and the increase in energy efficiency will be vague. Overall, however, the ‘cap’ should reduce emissions and move money obligations toward lower carbon, higher effieciency systems.

    You have made an excellent point, indirectly. Carbon emissions will not decline without a monetary incentive to do so. The big problem is that carbon-based energy systems do not include the secondary costs of their use (although coal may be next to have to include secondary costs). Some artificial monetary obligation system is required to insure that the secondary costs of fossil fuels are included in their total cost. Nuclear energy is very expensive in part because many of the secondary costs of nuclear power are captured in the capital and operating costs of a nuclear plant.

    Finally, some very strong monetary obligations in energy use are on the near horizon. Within a short time, years to a few decades at most, the increasing shortage of oil and natural gas compared to growing demand will greatly increase fossil fuel prices. Those monetary obligations that have moved away from fossil fuel energy will strongly benefit. What is needed is a system of monetary obligations that recognizes secondary costs and allows a longer term perspective than the next quarterly report.

  2. Jo, Mike Ruppert has said for years and years, “Until we change the way money works, we change nothing” – and I believe this paraphases statements by Hubbert who imagined a paradisical post peak “steady state” society. I hope you’ll check out Ruppert;s new book.

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