Reducing Resoucres Consumption - A Proposal for Global Resource and Environmental Policy

Environmental and resource economics do not give the emphasis to ecosystem functions and the natural world that their importance to human welfare and the economy warrant. Insights from ecological economics, in contrast, suggest that the overall material throughput of the economy, in addition to the wastes it emits to air, sea and land, need to be greatly reduced. While environmental economics suggests that market-based instruments would be an efficient means of achieving both resource and environmental objectives, there are in fact many reasons, revealed by Public Choice analysis, why these are not implemented. Notwithstanding, it seems likely that, to address the pressing resource and environmental challenges facing humanity, policies will need to be implemented at both the international and national levels. This paper suggests that existing climate policy, based on international targets and national policies to meet them, could be supplemented by a similar policy on resource use, involving: either a global level of taxation to meet resource use targets, with transfers to poorer countries to aid their resource-efficient development; or a global resource permit trading scheme, with diminishing resource allowances over time. The latter could begin with a small group of larger, industrialised countries, which encouraged others to join the group by imposing taxes on imports from non-members equivalent to their own self-imposed resource surcharges. Coupled to a regime of Sustainable Commodity Agreements, to promote environmentally sound resource extraction, such a system could lead over time to the globally sustainable development which has as yet quite eluded the global community.

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