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Ecological Fiscal Reform

There once was a time we thought we could never run out of cod. It is frightening to consider that most current economic theories came at a time of perceived limitless resources. But could the earth’s environmental wounds launch a new economic theory? Or, in a more practical sense, could price actually reflect cost?

Our economic indicators value certain aspects while many others are ignored. Raising your own children, growing your own tomatoes and volunteerism are just a couple of examples of activities which benefit society and yet are completely ignored by economic indicators such as the Gross Domestic Product (GDP).

Our measures offer no differentiation between economic growth that is sustainable and economic growth that causes endless long-term problems. The situation can be likened to a farmer selling off his planting seeds and his machinery for short term profit. We need to look beyond our current economic indicators to measure the health and prosperity of Canadians.

It is certainly difficult to give a value to the essential ecological services provided by a lake or a forest, and there is arguably no perfect way to do so. There is, however, a fundamental error in not assigning any value to the natural world, when, whether we like it or not, judgements are made based on cost-benefit anaylses. Currently, the costs of losing those very real ecological, aesthetic, and economic benefits is not included in the price of of the lakefront property, or the wood from the forest.

Imagine if prices were reflective of all the costs the use or exploitation of a product might incur. Imagine if the price of a litre of pesticides wasn’t the $22.98 that Home Depot charges but actually reflected the cost to the earth, our children, our watersheds and our lives. It seems ironice that NGOs trying to protect the environment are doing more than the business sector to preserve a world where it will be possible to live and do business.

Business leaders, economists and our represented officials need to understand that sustainable solutions can be profitable in more than raw economic terms. Short-term profit at the expense of long-term sustainablitiy is irresponsible and ill-considered. Certainly our children and grandchildren will not thank us for it, as they are left to deal with ecological disasters that we could have prevented.

Learn more about the recommendations of the Green Budget Coalition regarding ecological fiscal reform and other federal budget matters

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