The environment debate is rapidly moving on from broad agreement on the problems to ideological divides on the solutions. The green movement has been successful in raising a range of issues. Can it now put aside its obsession with government intervention and “doomsday” economics and openly embrace rational, practical market-oriented solutions?

While many greens have a deep understanding of environmental issues, most appear as capable of dealing with economic policy responses as the abacus is to performing complex financial modelling.

Sackcloth and ashes responses to environmental issues may appeal to a hard core of activists, but political parties know that if they are going to successfully pitch to soft green voters that they will need to provide practical solutions that deliver outcomes with minimal economic pain.

If they do not embrace market solutions to environmental issues, then governments will only be left with the option of cutting services to cover the costs.

Anyone who has spent any meaningful time in the finance world knows “scenarios” ultimately have little correlation to reality. Analysts in Wall Street investment banks rarely get their exchange rate forecasts or commodity price forecasts accurate over three month periods. Placing apostle-like faith in a Tony Blair-appointed economist, for instance, surely carries similar risks.

Closing the coal industry, cutting base load generation capacity, crushing industries with regulation and taxation, destroying the consumer and “zero growth” policies. These policies have economic and social justice consequences. They will mean less revenue for governments. This means less money for hospitals, less money for education, less money for foreign aid and less money to deal with climate change consequences in the developing world.

This is not an ideological debating point. It is basic economics. Voters understand it – and will not accept it.

The green movement has correctly identifying many problems. Can they now communicate viable, rational economic policies and solutions?

History has shown that any time any significant project or undertaking is left in the hands of the government or bureaucrats – or ideologues – the biggest loser is always the taxpayer. The economy suffers. The problem is made worse. Can anyone seriously think long term environmental management will be any different?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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