I've just been reflecting on my post below about carbon constraints, and the one further below about a sustainable world being an expensive world. It is clear (to me) that the policy/intervention that gives the greatest chances of keeping human footprints within planetary limits is the one that pushes the supply curve downwards. The example used below is the carbon tax. When comparing the two measures (demand reduction and carbon tax) the tax is the only measure that can be designed so that planetary limits are never breached. Other meaures, for example ones that move the demand curve, might still result in a scenario where limits are breached through a product or service being sold ridiculously cheaply (perhaps through dramatic economies of scale) and someone being prepared to supply huge quantities at that price (resulting from a significant shift in the supply curve, perhaps through the effects of government subsidies, or through loss-leading activities). By contrast, with a supply curve kept within planetary limits (eg through carbon taxation) then however the demand curve shifts, there will never be enough produced and supplied (let alone sold) to breach planetary limits because it would become infinitely expensive to produce (even if not sold) the final unit of production that went over the volume limit.
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About the BloggerI'm David Calver - an Accountant with a passion for sustainability. Categories
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