Take Back America
One of the recurrent themes at the United Nations' spectacularly unsuccessful Rio+20 summit in June was the need to change how we measure wealth. Many argue that we must abandon our obsession with gross domestic product (GDP) and develop a new "green" accounting standard to replace it. Such a system, advocates suggest, would incorporate economic decisions to preserve the natural environment, says Bjørn Lomborg, an adjunct professor at the Copenhagen Business School.
However, greater understanding of such a metric reveals the fallacies involved. Notably, by placing a disproportionate focus on preserving the environment and maintaining the status quo, a "green" standard would stifle economic innovation and discourage civilization-altering discoveries.
The prototypical example reported in the run-up to Rio+20 and used to support "greening" GDP centered on the Nakivubo Swamp in Uganda's capital, Kampala.
This supposedly efficient decision, however, is ultimately misleading. The problem in this case is that, eventually, some proposal will come forth for the swampland that is more valuable than the $2 million that it is currently worth. But environmentalists, enabled by a green accounting standard, would block such a change in the name of preservation.
This outcome, which is inevitable given the swamp's proximity to a major city, underlines the problems with such a standard: they fail to account for long-term benefits yielded by short-term sacrifices.
Source: Bjørn Lomborg, "The Problem with a 'Green Domestic Product,'" Slate, July 15, 2012.
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