The intense media exposure at this year’s COP talks in Paris has left climate change the hot topic of 2016. A big question lingering in my mind after the event was: what will be the financial outcome from environmental impact and industrial change in the next decade? In industry, some might complain that putting the planet’s wellbeing ahead of the dollar will ruin the world’s economy. However, I believe that the dollar has already done just that. Don’t get me wrong, I like money, as a concept - the world of trade without money would be complicated to master especially in this day and age. The issue is in how we quantify the value of the dollar. Dollar values can change based on a million different reasons, that’s what doesn’t seem logical to me, especially when you consider that the environment gets a raw deal.
Hear me out…
What if the economy was more like chemistry? For example, you could compare chemical reactions to closed environment transactions. Meaning, you can’t create more value out of something that doesn’t merit it based on its intrinsic qualities. In a reaction, chemicals change from beginning to end but you always end up with the same amount of basic materials. In economy, this means you couldn’t trick the system to make something more valuable without paying for it somewhere else.
Let's say the world system collapses, zombies run amuck - or whatever you imagine might happen in the apocalypse, at the fall of society. Initially, those dollars you have hidden in a jar in the back of your sock drawer or in a shoebox on the top shelf of your closet would be useful because people would cling to the idea that money can be used for obtaining goods. When it gets to the point when you don’t know where your next gallon of water or bite of food will come from, you probably won't care about money; you’ll want concrete goods. Now, this becomes more of a tangible economy comprised of basic exchanges.
Back to chemistry - if you recall high school science class, you had to balance the chemical equations so that everything on the left matches everything on the right. The law of conservation of energy states that energy can’t be lost or destroyed but it can be transformed. Chemistry is a system where overall value is a constant. This is something fundamental to the core of everything that keeps balance in our physical world.
When you apply this chemistry idea to money, value is no longer arbitrary, balance between materials and money becomes a must. The transformation in a chemical reaction as a result is the impact the economy has on the environment.
Imagine a world where the dollar value of goods is based on what materials are actually made of, the energy it took to become what it is and the energy used for transportation and this would all be standardized.
The idea that something is cheaper in one country over another would be based on the location of raw materials, not based on where you can get the cheapest labor to prepare or manufacture these materials. My concept would push for localized growth and economy.
A system like this wouldn’t pull away from the idea that you get more for your effort, rather, it would raise the bar so people wouldn’t be able to take advantage of underdeveloped nations or people who don’t understand global economy.
Thus, if a process requires a lot of material, it would be more expensive. If it requires more energy to make or transport, it would be more expensive. Financial gains would still be possible but without the use of cheap labor or environmental sacrifice, industrial ingenuity would be critical.
In the end, the power to do something does not suggest you are doing it well nor does it give you the right to do it.
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Photo used under Creative Commons from Noel Feans