When government steps in, incumbents tend to get upset. Understandable - the gas supplier entered the market under certain conditions, conditions which the government is now changing. Of course, as a business risk, there’s nothing special in that.
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From the article:
Last month, the ACT government unvieled the next stage of its strategy towards zero net emissions, and has set its sights firmly on reducing the territory’s gas use, which is now the highest source of greenhouse gas emissions for the capital and is ultimately aiming to phase it out completely by 2045.
Ignoring the spelling error, that sounds surprising given that most of the ACT’s residents drive to work and the number of electrical or even hybrid vehicles is minuscule.
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But how will they cope with all the emissions from their legalised marijuana?
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I guess the article writers excluded transport greenhouse gas emissions as the basis on how much gas adds greenhouse gases in the Territory… The ACT Govt have now introduced all Renewable sourced Electricity so gas in that heating, cooling and cooking sector would be the highest generator now. Not plainly or clearly stated in the article as to what they intended to mean but the linked article if read would certainly help clear up what the intent was. They also state in the linked 2nd article that vehicles produce 61% of emissions and that gas usage for heating, cooling and cooking added 22%…
Also important here is the reference to “net” rather than vanilla zero emissions. It would depend on how they offset any carbon emissions eg tree planting, buying carbon offsets. The linked 2nd article also states they are moving to support the adoption of emission free transport, but they are unable to push as hard on EV as they believe that will require Federal support. Emission free transport they note would be battery powered cars, hydrogen ICE cars, electric & hydrogen powered buses. So perhaps in the end net zero may become actual zero or very close to.
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Marx may not have had any practical solutions, but he absolutely nailed the nature of capitalism.
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The OECD global materials outlook to 2060 is out. Well it came out months ago but I forgot to look.
The summary is as foreshadowed, GDP to rise X 4 and material consumption by X 2 driven by population growth and growing per capita consumption of developing nations.
They forcast growing decoupling brought about firstly by structural change as less developed economies move towards a greater proportion of service industries as developed economies have already done. Service economies use less physical resources than production economies.
Secondly they forecast technological improvements, which will allow us to do more with less. I hope they are right.
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The section 'What are the environmental consequences’ on page 16 is worth a read as some of the forecasts are very concerning, such as a 50% increase in CO2eq between 2030-60. The increase is mainly from fossil fuel combustion.
It possibly also shows while developing nations are endeavouring to curb their emissions, the increasing CO2eq most likely from development of developing nations will outstrip any net reductions from developed nations.
Hopefully it is one of those economic forecasts which is proven to be wrong over time.
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Extreme Austrian school totalitarian Capitalists commonly blame “expectations”. We expect more these days, they aver, so we shouldn’t be surprised if a single wage won’t suffice. That ignores the fact that baselines shift. In market economics, if the baseline shifts on one side and the other doesn’t move in proportion, then the market has failed.
When Justice Higgins established the minimum wage, he didn’t assume that the average Australian lived in a tent and cooked game that they’d hunted themselves over an open campfire. Higgins chose a more realistic baseline. Over time, that baseline (what totalitarian Capitalists call “expectations”) has moved. These days, life without a motor vehicle is difficult for most of us. Telecommunications, electricity and information technology (including television and radio) are basic necessities. If the market doesn’t provide the necessary income, then the market has failed.
It took business interests the better part of a century to overturn the principles established by Justice Higgins. The decline in quality of life can be traced to that overturning, though the rise of more exploitative employment practices probably plays a role.
Mr Higgins ruled that, regardless of the capacity of the business to pay, the employer must pay wages that meet “the normal needs of an average employee, regarded as a human being in a civilised community”. In that, he echoed Pope Leo XVIII:
The notion that the value of labour is not limited to what an employer will pay horrifies totalitarian Capitalists. It’s an argument that I had repeatedly during my years at the CES. Polanyi characterised labour as a “fictitious commodity”. Labour exists, regardless of demand.
A business must pay the full cost of all of its inputs. Before a worker enters the workplace, they’ve been nurtured, educated, housed and sustained. The market must pay for all of that. If a business cannot pay its share of the accumulated debt of a life, then that business is technically insolvent.
Failure of one in no way excuses failure of the other. Capitalism might not be the reason, but extreme Capitalism is undeniably at least part of a reason. The lesson is that extremes tend to fail. Extreme laissez faire Capitalism is no more viable than extreme centralised planning. Even the messiah of totalitarian Capitalism had his doubts (though he was loath to detail them). As Keynes wrote to Hayek:
Hayek’s publication of The Road to Serfdom spawned many responses. As a matter of interest here’s an obscure one that I found intriguing. Bear in mind that it was written at the end of World War II. The planet was different then.
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Perils of over-reliance on market forces.
Erosion of trust might be among the worst failures of over-reliance on market forces.
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I’ve seriously tried to believe capitalism and the planet can coexist, but I’ve lost faith
Some more musings on the consequences of infinite growth and the possibility of decoupling. This time from a real Aussie economist!
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Capitalism isn’t about infinite growth. Its principally is an economic system in which private individuals or businesses own capital goods and there production/supply Is based on the demand in the general market. The opposite is centralised economies, like the principles of communism, where the state in effect owns and operates the economy.
A good definition can be found here…
It is also possible to have ongoing growth and wealth creation without irreversible and/or significant environment or social impact in a capilalist economy . It requires good government policy and regulation where any approvals or permits are assessed against environmental and social values, and those which have no or acceptable impacts are allowed.
Please show me how and where this has happened and how we will get it in future. The UN and many other economists would like to know. Did you read the link? There are many subsidiary links supporting the whole argument. It will take a while.
Just because indefinite growth isn’t in the definition of capitalism doesn’t mean it is not implicit in the system.
You say: “Capitalism isn’t about infinite growth.” When has capitalism ever worked without it? Is it not the case that our economy requires a constant percentage growth to be healthy? I think the preference is between 2 and 3% PA. Does not constant percentage growth mean exponential growth? How is never ending exponential growth possible on a finite earth when economic growth implies resource usage growth?
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It hasn’t happened in recent history, but has a chance to work in the future…and could with community/social/corporate and government will power.
If there was a true circular economy, were all resources were resused and pollution eliminated with the opportunity for ecoystems to be regenerated…add in improvements in efficiency and productvity, then this provides the potential for growth. If one then increases the value of products and services within a circular economy, this would lead to further growth.
Efficiencies and/or increased productivity can be achieved through technology, as well as things like shared products (and example would be cars which today most have a low utilisation when owned by an individual. If a vehicle is shared with others with difference use profiles, the one vehicle could service greater than one individual…lets say it services two. This increased utilisation of productivity increases availability of resources, which would have been used for the second vehicle, and makes them available for other uses. If these other uses are of higher end value than a vehicle, this can lead to higher growth.
Where there is a shortfall in resources, if these are renewable or reusable, these can be still won through operations which have low impact or offset their impacts…
All the above can be controlled by the private sector (capitalists) no differently to that which exists today.
One just needs to think of the possibilities, rather than thinking the past where such is seen as impossible or against practiced economic theory or the traditional economic model.
It is also worth noting that economic growth has occurred within the four recognised types of economies (traditional economy, market economy, command economy and mixed economy) irrespective of whether there is underlying capitalism.
An economy dominated by capitalism, where recent long term net growth is zero or negative is Japan. Over the past few decades, Japan’s highly capitalist environment has not lead to growth…and dispels the myth that capitalism equals continued growth. Yet, capitalism (the Japanese form of collective capitalism) still prevails in Japan.
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Japan has two faces. Which one should we consider best reflects the nation? The business face or that of its population, unguarded in the family apartment.
P.s.
Worth more thought.
Unfortunately sometimes it is much easier to argue against something than to see things differently.
This might be best in the climate topic, but seems relevant here since the linked article is about capitalistic investment outcomes.
With our present government and its stone headed support for fossil fuels, rejection of community and social activism in favour of supporting miners, such as Adani, by hook or crook, it is refreshing to see that corporate interest are s.l.o.w.l.y recognising their historical capitalistic operations are a threat to their own future and the future of the planet. The following addresses some effects from corporate investment.
Australia is known as ‘The Lucky Country’ because it has prospered in spite of government and itself; it was a pejorative rather than an accolade. Our government is one of the most conservative business friendly out there, elected and re-elected by ‘the community’.
Modern capitalism demands growth and punishes for not achieving ‘enough’. If a company misses its targets or analyst expectations its share price can tank even though it is going well and highly profitable.
As practised since the industrial revolution it has nothing to do with anything except wealth in an amoral context. The concept of noblesse oblige is long forgotten and replaced by ‘me, my mine’. Greed makes the world go around and that reality is reinforced by those cultures where a person’s value and often respect in a community is all but synonymous with their wealth.
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Fortunately for the modern world “falling on your sword” often practiced more literally in the Japan of the past has a softer touch. More a reward in how well plumped the pillows used to soften the fall. Shareholders excepted.
Capitalism is simply the option of letting someone else gamble with your money, rather than you boxing the daily double at Flemington? In someways there is zero growth in the second version, and zero gain to the net wealth of the punters (investors). TABCorp et al excepted.
P.S.
Now if growth was redefined as consuming less and creating sustainability?
You are dispelling myth that doesn’t exist. At the end of 2019 GDP growth in Japan was 1.8%. More to the point they were not happy about the recent very low growth and have used significant stimulus measures to try to correct it. The point is that capitalist governments want steady and unending growth, that doesn’t mean they always get it but they suffer from great anxiety when they don’t.
Back to Oz, we have governments on both sides spruiking growth over the last 28 years and trying to say how good it is and they were responsible. The reserve bank constantly tries to jiggle the levers at their disposal to get growth in their sweet spot of 2-3%. We recently had articles about whether the Morrison government would be embarrassed by the February figures or would they squeak in through a statistical anomaly. Constant growth has become a fetish and no alternatives are to be contemplated.
There are hundreds of articles annually from economists about the need for growth, how to get growth and their worries if we don’t have it. The UN publishes learned papers on the consequences of unending growth and whether resource growth can be decoupled from economic growth. There are links to several upthread.
I think you are wide of the mark if you say current economic theory does not say that for capitalism to maintain living standards and keep unemployment down it needs constant growth and many, many leaders around the world who go to a great deal of effort to obtain that.
Your suggestion that a circular economy ought to be looked at and that we need to consider other possibilities are good. To do so will require a huge effort and to be frank I have no idea what the solution may be. I agree that resource utilisation can be done in a much less environmentally harmful way but that will not make finite resources last forever if more are required every year.
At the moment:
- constant growth is seen as not just a boon but quite essential,
- economic theory is used to support that this should be so and
- that growth requires matching growth in resource usage.
This cannot go on indefinitely but it is hard to get anybody in power to even talk about it much less start looking for alternatives.
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The essential principles of a capitalist economy are based upon growth. ‘Must grow to avoid stagflation or deflation.’ ‘Look at the problems Japan has been dealing with because there are not enough mouths entering the production line as old people leave it (die).’
Listen to our government, and it’s all about growth. The reality is that Australia’s economy has only been growing with its population over the last decade - but you won’t hear that from a government minister.
Capitalism needs growth; the question is whether our planet can survive it.
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