Global Growth

Economics is the production, distribution, and consumption of resources between multiple groups of people. It studies how people interact with goods and services. Not only does it study people, but it focuses on the behavior of businesses, governments, and even nations. The book Doughnut Economics, by Kate Raworth, was at the center of our Econ: Risking Value course. In the book, Kate Raworth shares her views on the world of economics and how it can be improved. She maps her ideas in a diagram shaped like a donut. These ideas relate to how economics can be used to fulfill the Sustainable Development Goals of the UN. The main cause of our financial problems derive from choosing economic growth over everything else. For this action project, I share my economic principle that would help solve current and important issues impacting our world today, such as climate change.  I hope you enjoy!

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My economic principle is modeled after William Nordhaus' "spaceship economy" - focusing on environmental issues in need of attention, but require policy change in order to work. Economist William Nordhaus once said, “Things which have traditionally been treated as free goods - air, water, quiet, natural beauty - must now be treated with the same care as other scarce goods.” Climate change is an issue that has been ignored by our nation's government. The environment might not seem like an economic issue, but could be saved with an economic solution. Global warming is the result of large companies profiting off Earth’s resources without moderation or regulation, and people are suffering as a result. What if the government were to hold these companies fiscally responsible?


According to a report released by the Rhodium Group, a private climate-research firm, after three years of decline, carbon-dioxide emissions increased by an estimated 3.4 per cent in 2018. My economic principle involves taxing businesses on their use and production of carbon in order to keep emissions and greenhouse gases at reasonable levels. This would incentivize companies to invest more in pollution-reducing systems. "But the summit’s Australian host, then Prime Minister Tony Abbott, had been determined to stop the meeting’s agenda from being ‘cluttered’ by climate change and other issues that could distract from his top priority of economic growth, otherwise known as GDP growth.” (Kate Raworth, Doughnut Economics, Page 32) Surprisingly, the climate and economy are interrelated. Scientists estimated that if temperatures rose to 3 degrees Celsius, the global GDP would fall 25%. 

Just like homework, it is better to get it done sooner than right before the deadline. If you wait too long, it'll be too late and you'll suffer the consequences. If governments around the world wait too long to act on environmental issues, we will ALL suffer the consequences. Money talks and motivates companies to change behavior. If the use and production of carbon were taxed, businesses would find ways to become more environmentally conscious in order to avoid paying taxes over a long period of time. Throughout this term, I learned that economics is not just about distributing money and resources, but has the power to change the future health of our world. I hope you enjoyed!

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Citations
  • Amadeo, Kimberly. “What Has Climate Change Cost Us? What's Being Done?” The Balance, www.thebalance.com/economic-impact-of-climate-change-3305682.
  • Kormann, Carolyn. “The False Choice Between Economic Growth and Combatting Climate Change.” The New Yorker, 4 Feb. 2019, www.newyorker.com/news/news-desk/the-false-choice-between-economic-growth-and-combatting-climate-change.

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