At the top the environment

These days, environmental protection is at the top of the agenda of the discussions at the World Economic Summit in Davos. The negative consequences of global warming can no longer be ignored, and the pictures of the devastating wildfires in Australia once again show the explosive nature of the problem, even if it is still barely reflected in the economic statistics.

Economic calculators were once developed to make economic success measurable – as income minus costs. The costs are all expenses that can be valued in monetary terms, both for the companies and at the macroeconomic level. The freely available environmental resources water and especially air have not been included for far too long. Even today, the costs of pollution are usually not borne by the polluter, but by the general public.

This economic miscalculation must be changed as quickly as possible, there is probably broad agreement on this, although not on the right way to achieve it. There is no way around a (noticeable!) CO2 pricing, if possible on a global scale. Such a pricing system can then also stimulate and make profitable the necessary investments that will make cleaner technology possible. The market-based price mechanism will ensure this, and more efficiently than any planned economy approach. In this respect, a more climate-friendly economy does not necessarily mean weaker growth rates, but a major change in our production and consumption habits will undoubtedly be necessary.

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