A Sustainable Energy Policy Looks at Externalities

By Craig Shields, 2 Green Energy:

I just sat down over lunch with a printed publication to which I subscribe called the “Green Money Journal.”  Fantastic stuff.  I loved the lead article, “From Growth Capitalism to Sustainable Capitalism,” by Joe Keefe, President and CEO of Pax World Management, which manages about $2.5 billion using an approach the company calls “sustainable investing.”

I encourage everyone to read this excellent piece, as it does such a good job in pointing out that outside of a small niche of people operating in socially responsible investing (SRI), the world makes no distinction between a dollar made from selling Coca Cola or extracting oil or burning coal and a dollar made from installing a solar panel or thermal insulation on a building.  The author goes on to point out that this viewpoint had led, and continues to lead, to gross and obvious unsustainability in terms of resource depletion, climate change, and dozens of other symptoms.  He concludes with the notion that this must change radically if our civilization is to survive, i.e., that SRI must replace growth investment.

Keefe mentions the concept of “internalizing the externalities,” i.e., putting a cost on products and practices that consume or destroy resources.  Of course, I’ve written about this more times than I can count; it seems to be the only way to affect the marketplace for things that are ruining our planet.  We burn coal to generate electricity because it’s cheap.  It really isn’t cheap at all, if we consider the long-terms costs; according to a recent report from Harvard Medical School, the cost of lung disease and environmental damage is $700 billion per year in the U.S. alone – and climbing steadily, of course… Read more

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