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Saturday, March 25, 2017

Book Review: The Ecology of Commerce

Posted by Tim Stobbs on December 12, 2008

Alright I finally got around to reading The Ecology of Commerce by Paul Hawken after it being recommened to me by a couple of different people.  I have to admit after reading it I’m in a bit of a like/hate frame of mind over the book.

On one hand the book is a bit over idealistic which I hate.  There seems to be a bit of if we just do this idea we will solve all the worlds ills attitude running in the book.  I don’t have a problem with people being hopeful or positive about change the world, but Paul was really over doing it at points.  So that turned me off a bit near the start.

On the other hand the author obviously knows government isn’t going to solve the worlds problems, you need to get business on side.  He rightly points out business is great at setting a price on something.  The market is truly excellent at setting a price that works for everyone.  At the same time business sucks at taking into account the true cost of some items (like producing a chemical which is toxic to all life and doesn’t break down), which is where government is required to help initially set only the cost on.

So Paul suggests we put in green taxes on everything toxic and hazardous from pesticides to excess carbon dioxide and then take the money and provide income tax breaks (if the idea sounds familar, it should be, it is like the Liberal Green Shift, but expanded).  Rather than shoving it down business all at once, he suggest a 20 year sliding scale to let everyone slowly adjust to it.  Which I think is a great idea.  The long term goal of the green taxes is to provide customers with real prices which reflect secondary environment costs in the products they buy and to reduce income taxes to zero towards the end.

Then to shift resource companies from trying to extract everything at once and fighting conservation changes, Paul suggest altering their business model.  You transform them into hybrid enterprises where you give them a limited monopoly in exchange for certain regulations and a fixed profit.  Then you put a carrot out there for them to curb usage.  You see right now a power company can only grow if they sell more power, but if you give them a fixed benefit for reducing their customer usage (a ‘negawatt’) the company would actually do more to balance the existing supply and demand within their area.  It would make sense for them to give customers CFL’s and pay them to get a new efficent fridge.

The exciting part of this idea is when you expand the idea it to oil companies.  You offer them a ‘negabarrel’ price incentive, so for every barrel of oil they reduce our usage on they get a set price in a year.  So rather than having Exxon fight about higher fuel effiency standards for cars they would actually be supporting them.  Also Exxon gets to keep more of its oil reverse which will result in a better long term payout from the company for investors.

So on the business side the book Paul has some great ideas.  Yet overall the one idea I like the most was this: when faced with a choice take the path the leaves you the most options.  So in the case of carbon dioxide and global warming, we don’t know how much the earth can handle before things get really bad.  So rather than finding out, let’s scale back our usage now of fossil fuels and encourage a energy efficent economy.  If it turns out later than we are wrong we then still have a efficent economy and more resources that will last longer.  Overall you are still ahead.

So what are you thoughts on green taxes?  Good, bad, or ugly.  I like to hear them all.

Comments

2 Responses to “Book Review: The Ecology of Commerce”
  1. Goalhunter says:

    I love the idea of a real price. Whether you get that by imposing green taxes or not, I don’t know. Taxes funelled into the government scare me, even if the supposed route of the taxes is right back to the people as tax breaks.

    Perhaps we just give all the costs to the companies. That is, make laws to require companies to leave the Earth as they found it. That way, maybe they pollute to get something out of the ground, but then they have another business that removes said pollution. They solve their own problem, maybe getting to make money on both sides. On the other hand, if they can’t do it they can’t be in business.

  2. Alex says:

    Another book you should consider reading is Paul Hawkin’s “Natural Capitalism” (http://www.natcap.org/). It really made me realize how much of our supposed ‘capitalist’ society is subsidized by our government, and in much more subtle ways than is currently top of mind with the US banking and auto industry.

    I’ll add to that a blog post: http://www.monbiot.com/archives/2008/11/25/one-shot-left/ . Change is becoming more critical and and urgent every day.

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