Mittwoch, Oktober 20, 2010

And Here's The Next Big Thing...

Be prepared, over the next several weeks, to be bombarded with yet another attempt to grab your wallet and impose Watermelon policies on an unexpecting populace.

The word to remember is an acronym: TEEB: The Economics of Ecosystems and Biodiversity.

Put simply, it's an attempt to put a price on the ecosystem to make it highly profitable for companies to behave as their betters demand: don't pollute, don't harvest forests, don't do anything that can be considered even remotely environmentally unfriendly. I've take a preliminary look at what they report, and all I can say is: meh.

First and foremost, it's a problem of valuation. They are trying to put a value on something that is fundamentally and inherently not out there on the market, meaning that the price is what they say it is. In other words, they are behaving as monopolists do, setting up monopoly rents for their "ecosystems services" to be what is most profitable for them.

In other words, it's yet another attempt to grab your wallet and take whatever they can from you: "proper" and "approved" behavior will be rewarded, all others, prepare to be taxed out of existence (they don't say that explicitly, but at the end of the day, that is their goal).

Here's a press release.

It's fundamentally an attempt to obtain control over any economic activity by requiring a cost-benefit analysis to be performed before the economic activity is allowed: in other words, if they think keeping a mangrove forest in place would be of greater benefit than using that forest as a shrimp farm, then if you want to put in the shrimp farm regardless of what they say, you'll have to buy offsets.

In other words, a tax.

The fatal flaw here is the subjective nature of the valuations and the fact that they are using an extraordinary simple analysis of future values: they take the current value of "ecosystems services" (determined, apparently, in an ad-hoc manner) and determine the NPV (net present value) of future "ecosystems services" to get a summed price, then compare that to the current value of the alternative usage.

Problems with this approach:

This always results in "ecosystems services" to be vastly more expensive than alternative usages;

The discount rate becomes critical (as we've seen with the absurdities of the Stern Report: anything deviating from a net discount rate of 0% is considered immoral...) and subject to abuse;

It completely ignores the costs to humans of deferred economic betterment across the same time periods.

Like I said, meh. Yet another attempt by those who really, truly think that they know better to run the lives of everyone else.


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