The Movement for Ecological Truth

This blog was inspired by the following quote by Oystein Dahle, former Vice President, Exxon, Norway: "Socialism collapsed because it did not allow prices to tell the economic truth. Capitalism may collapse because it does not allow prices to tell the ecological truth."

Monday, May 01, 2006

What is "Telling the Ecological Truth"

Telling the ecological truth means that the price of something takes into account the enviromental damage that it does.

For example, when you buy an item, you pay the wages of everyone who work on it, you pay for the raw materials that went into it, and you paid profit to whoever owned the factory and the store. Since you were willing to make the purchase, the amount you paid must have been less than the benefit you got from purchasing, so your standard of living went up.

However, the production of that item produces pollution. This makes the standard of living of everyone around you go down. However, since this does not directly affect you, the price you paid understates the true cost of the item you purchased.

An example of telling the ecological truth is the tax rebate being offered on solar panels in California. The truth is that everyone benefits from the electricity you produce, the fact that electricity didn't need to be generated to meet your demand, so you ought to be compensated for that.

Another example of telling the ecological truth is when companies get fined for illegally dumping toxic chemicals.


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