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The Forum > Article Comments > Too much faith in the market > Comments

Too much faith in the market : Comments

By Sharon Beder, published 18/7/2008

Why do we put so much faith in the market to solve environmental problems?

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“An emissions trading scheme will see the price of electricity and manufactured goods go up but that is no guarantee that the market will invest in alternatives, especially if polluters can pass on the extra cost to consumers, buy up environmentally dubious offsets, or be compensated for extra costs that might damage their international competitiveness.”
Absolutely true.
When JFK set the -then- impossible goal of a man on the moon within a decade, was this 'government intervention'?
In the 70's, when we finally got sick of too many of our children dying on motorbikes that were simply too powerful for inexperienced drivers, Governments around Aus. responded with a 250cc restriction.
The result? 'The marketplace' responded with predictable turpitude; within just a year or two, the 250's were leading the bigger bikes around the race track.
There is no doubt enlightened legislation can stimulate technological advances; exactly what we need to become -renewably- energy self sufficient.
The marketplace will never do this; not while the biggest players have so much invested in the status quo.
Posted by Grim, Friday, 18 July 2008 10:16:31 PM
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Grim thinks "enlightened legislation can stimulate technological advances." This is code for 'picking winners' and govts are notoriously bad at it.

There is simply no such thing as "enlightened legislation" for that requires "enlightened politicians" and they do not exist.

A recent example of 'picking a winner' is the Commonwealth and Victorian Govts' gift of $70m of taxpayers' money to the largest (and most profitable) automotive corporation in the world. Toyota had already planned to build the hybrid Camry anyway, and the CEO seemed unsure what to do with the money. The Commonwealth plans to hand out more taxpayer-funded goodies to Ford and GM. But not the Tata?

Or what about the "enlightened legislation" to hand over taxpayer-funded subsidies to farmers to grow grain for fuel instead of food? Result: starvation and food riots.

It is not true that large corporations are not investing in new technology. A recent report in The Economist magazine indicated that global investment in alternative energies has increased from $28bn in 2004 to $71bn in 2006. As oil prices continue to rise, the incentive to invest more will rise also.

In relation to the Apollo program, it was certainly a govt intervention, and an extremely expensive one (not just financially but also in terms of lives lost). Perhaps you think it was justified, and maybe it was. But if so, you need to demonstrate that the benefits outweighed the costs, including the opportunity costs.

Same applies for the ETS (or CPRS). Do the benefits outweigh the costs? The Govt has an economic and moral obligation to demonstrate that they do. After all, they are messing with our money and our lives.
Posted by bro, Friday, 18 July 2008 11:48:11 PM
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I thank bro for his examples of unenlightened legislation, and I agree the list is endless; most recently the awarding of carbon credits to polluters. I'm sure even bro would not maintain that even a government as unrepresentative as our own get everything wrong.
The CSIRO has a long and distinguished record of developing new technologies and systems, to the point where they can be given away to foreign investors...
Clearly, we need better government. Sadly, we won't get that by simply offering more money to politicians.
Perhaps if pollies wages were geared to productivity? When the median wage rises by $1. pollies get a $1. pay rise.
It would be nice to see a government -especially a labour govt.- which was more interested in thoughts and desires of ordinary people, instead of only elites, and the obscenely rich.
Posted by Grim, Saturday, 19 July 2008 7:16:58 AM
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“The fact that the Rudd Government is pushing forwards with an emissions trading system, despite the evidence that it won’t achieve much apart from higher prices for consumers, shows that it is not really interested in ensuring environmental protection. It is only interested in being seen to be doing something.”

Yes Sharon, Rudd says that he has pressures from the left and the right and that it is his job to strike the right balance. Well, the right balance would be way off to the left. His ‘balance’ between the interests of the business sector and environmental concerns is actually a licence to continue with business as usual.

We can’t leave the issues of climate change, peak oil, the need to find alternative energy sources, implement major lifestyle changes and achieve a sustainable society just up the business sector and market forces. We most definitely need strong governance to implement massive changes well before they would occur if just left up to the market.

That is the main difference between effective government-driven and market-driven change: the former would be strongly pre-emptive while the latter would be reactive and far too late to prevent massive pain.

Unfortunately, we will never have effective governance in this arena, because the soul of government was sold to big business long ago, end of story.
Posted by Ludwig, Saturday, 19 July 2008 9:04:19 AM
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have a wake up call people
listen to alex jones
for 10 minutes
http://www.youtube.com/watch?v=2etEqpF25eE

or listen to the whole broadcast
http://www.infowars.com/
or just listen to this
http://www.youtube.com/watch?v=iNEamw2ph6Y

anyhow you want it all chewed for you
see big buisness runs govt into active treason

find that hard to believe ?

see your COMPULSORY super contribution
[that goes on stockmarketeers anual bonus]

pumps YOUR WAGE into supporting the FAST FALLING stockmarket
check HOW your INVESTMENT has depriciated!
yet you are legislated to keep supporting it !
its taken out of your wage
COMPOLSORY

JUST like this NEW carbon TAX will be compuslory!
its PRICE wil be set by the market"!
dont believing the lie of 20Dollars a ton[thats just the bait]
its THE next cash cow to support the big buiness
and THE MARKET will set its COST!

our leaders lead us into TREASON

they will bring in the new-age version of the hitler youth
this worst of the commie and natzi system is comming
unless you decide to wake-up or at least hear the facts
do some research on it!

if you refuse to educate your self
why should we bother ?

if you think it wont affect you [it is time to wake up]
before the next cash cow leeches your pay as well as your freedom
Posted by one under god, Saturday, 19 July 2008 9:07:28 AM
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^^^

Ya can always allocate yer super to cash and just earn interest. In fact, given that that there's not that much difference b/w the long term returns between the three main sectors (cash, shares, property), them all being around 7-8%pa, it hardly matters where ya out it... in the long run. If you wanna avoid the heart stopping/starting nature of the schlock market, just put yer dough in cash and forget about it. Oh yeah, and pray that the money lending banksters dont inavertantly collapse the whole game (highly doubtful).

Ok, so put the tea cup down, storms' over.
Posted by trade215, Saturday, 19 July 2008 10:09:37 AM
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