Mike Totten Responds
"I agree that global warming is probably an overblown issue. And the only reason Enron supported Kyoto was because they could make money of "energy trading." (Here is an example of the profit motive leading people to support dumb ideas.)
"However, I disagree with some of the rest of your piece. Look at Brazil. It is very profitable to cut down the Amazon rain forest. Yet the Amazon soil is only six inches deep (compared to six feet in Iowa), and it's crappy soil. The only reason the rainforest continues to exist is because new growth feeds on dead growth. When the Brazilians clearcut, the area turns into a desert. A freakin' desert in the Amazon, for God's sake."
"Now: This is all verifiable, and is well-documented. And this causes obvious damage to Brazil. Haiti cut down ALL its forest, and it cannot regrow it for the same reasons that Brazil cannot regrow it. The money earned by Haiti is now long gone, and the countryside is a wretched environmental disaster zone. "
"You say that investors will take this sort of thing into account. And yet history shows that they do not. "
I said that investors can take that sort of thing into account and have. Besides which, the rainforests aren't cut down to make greater dividends for CalPERS or Citibank; rainforests are eliminated to put steaks on the plates of poor people. Investors are perfectly capable of making reasonable decisions when presented reliable and verifiable information. The key here is that the activist environmentalists are not so keen on developing and delivering that sort of information. Putting all the grief on the investor's plate when environmentalists have been actively fraudulent is garbage on a good day.
"Profit is not always the most important thing. A single-minded pursuit of profit does sometimes lead to the Tragedy of the Commons."
Single minded pursuit of profit also gets you arrested for Securities Fraud. I know this for a fact because I have friends who have put energy traders in jail. In that case, however, the kakistocracy of California actively invited fraud. That the fraud resulted in economic damage on an epic scale is due to obdurate stupidity on an epic scale, not rapacious investors.
"Notice that I did not say "Socialism is the answer." Socialists have a worse environmental record than capitalists. "
I absolutely believe that there are tremendous profit advantages in being a good corporate citizen and taking care of the environment. I do not believe that the people in control of the environmental dialogue are in any way interested in presenting their case in the framework of functional economics. Too many of them are locked into a 160 year old economic theory that all rational people have discarded and all investors ignore. It is a bitter truth that most of the Green movement would rather chase after an impossible implementation of Marxism than accomplish something meaningful that might make a profit.
I think they see the struggle as more important than the accomplishment. Because of that they are doing lasting harm to the environment by diverting the dialogue away from attainable goals. Finally, by not acknowledging that only wealthy peoples can afford clean environments, the Green movement is committed to a negative sum game regardless of what they claim as victory conditions. There is a contrast between professional investors who are in a positive sum game and the activist Greens who do not have a sustainable economic vision. The greater contrast, though, is that the professional capitalists have professional oversight and the political environmentalists do not even have to report to anyone. This would be acceptable if we were not talking about serious money, but with the Kyoto Protocols attempting to impact a substantial fraction of our GNP, the environmentalists need to be accountable.
When investors can reasonably rely on the data presented by environmentalists, they will start listening environmental proposals. When environmentalists stop blocking the replacement of inefficient systems and start championing efficient and profitable new methods and equipment that preserves the environment, they will get their proposals approved. When the Green movement stops chaining themselves to obsolete economics and viscerally offensive methods, they will stand a chance of accomplishing something meaningful. Until then, shareholders everywhere in the world will give no ear to the people who lie, cheat, and steal.