I vividly recall William Nordhaus’s articles from my economics grad school days. Beginning in the 1970s, he argued for transitioning from a “cowboy economy” to a “spaceship economy.”
A cowboy economy is one where we can afford to use the environment as a sink hole because the earth’s resources were seemingly infinite. He described a spaceship economy as one where in- and out-flows must be carefully managed.
While most economists were (and still are) satisfied with using unconstrained economic growth as a proxy for the good life, Nordhaus understands the downside of planning as if for endless growth on a finite planet.
As far back as the 1990s, Nordhaus posited that C02 concentrations would start to melt polar ice caps. His contributions went beyond dire predictions to solutions. The economic and scientific model he developed demonstrated that a small but increasing tax on carbon could have spared us climate change at little or no cost.
He shared the Nobel Prize in economics in 2018.
Nordhaus has upheld a minority view in economic and financial circles until quite recently. Now others are trying to awaken the financial community to the dire threats of climate change, pollution, and the depletion of scarce resources.
Well-known asset manager Jeremy Grantham of Boston-based GMO recently published a white paper postulating that humans are losing the race for survival.
“Now we watch these predictions coming true and ignore the data or pretend to. So, as the world starts to burn up, we twiddle our thumbs and talk about ‘just another heat wave!’ God help us.”
Grantham sees the crux of the problem to be the difficulty of focusing on long-term problems when we’re constantly faced with more immediate ones. “People have never been good at dealing with “long-term, slow-burning problems,” he says, concerning themselves instead with “stay[ing] alive and well-fed today.”
That may be a reasonable explanation of why society’s responses so far are seemingly inept. What are alternative responses for those of us who don’t hold the policy ball? Besides policy imperatives such as carbon fees, investments in renewable energy, and efficiency incentives and protections, there are actions each of us can do.
Sojourner’s executive director Rev. Adam Taylor suggests: “There are also personal actions that each of us can take, which may be seemingly tiny on their own, but when multiplied can make a significant impact. These include living within our fair share of the world’s resources and environmental limits in terms of what we eat and the food we throw away, how we travel, making our homes more energy efficient, and reducing our over-consumption of unnecessary stuff.”
Your own response depends on your time and your talents. New Yorker Linda Cheung decided to focus on climate change as a social problem rather than a science one. She exchanged a lucrative Wall Street financial career for social entrepreneurship.
Cheung is trying innovative ways to convince people that focusing on productivity as a measure of progress feeds unsustainable growth on a finite planet. Her current project is “augmented reality” murals.
When your cell phone hovers near an item on the murals in Miami — say a marine mammal or a piece of plastic — you learn its story relative to the environment.
We are well past time to transition from a cowboy to a spaceship economy. What story will you tell your grandkids?
Can you do art for the environment, reduce your impact on the earth, or register voters who will demand we care for spaceship earth? Which of these do you do; what more can you do?
— Karen Telleen-Lawton serves seniors and pre-seniors as the principal of Decisive Path Fee-Only Financial Advisory in Santa Barbara. You can reach her with your financial planning questions at firstname.lastname@example.org. Click here to read previous columns. The opinions expressed are her own.