Market prices ignore ecological costs

Although technologies exist to build an economy that is compatible with the earth’s ecosystems, market prices must reflect ecological costs before such an economy can be realized, advocates Lester Brown of the Earth Policy Institute in his new book, The Earth Policy Reader. Overplowing, overfishing, overgrazing, overlogging, and overpumping aquifers all contribute to economic prosperity, but they also create ecological deficits, Brown says. These deficits are beginning to add up and are leading to what Brown calls an ecological meltdown, a world in which deserts are expanding, water tables are falling, and temperatures are rising. Because these indirect environmental costs of goods and services often exceed direct costs, we need to restructure taxes to incorporate indirect costs into market prices, Brown says. Otherwise, as we have witnessed over the past year, we will pay greatly for accounting systems that do not tell the truth, he says. To learn more about the economic toll of ecological deficits, go to www.earth-policy.org/Books/index.htm and download a free copy of Brown’s new book.