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The ENVIRONMENTAL INDUSTRY SECTOR - what is it? #AUGUR

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There is a lot of resistance to internationalist economics as there is too to environmental concerns especially climate warming and carbon tax implications, which are not merely short-run crisis responses but will be embedded long-term etc. Environmentalism Industry as a sector is still something of a super- or para- industry classification not unlike how the personal computer industry was viewed in the 1980s as a service not resented because promoted as a cost-saving efficiency also by business gurus and all major consultancies. Environmentalism has the opposite profile by not obviously offering cost-savings and because the gains are social as if more like a tax and therefore in some views an unwarranted restriction on growth.

Neither computing nor environmentalism are either of these; more realistically seen as new industry sectors alongside the many others that emerged and grew at various times in history. Like others the precise parameters of each industry as a sector is imprecise. Until computing offered retail products and services it continued to be seen as a service provider dependant on business demand who would profit from the uses of these services and dictate the pace of growth of the IT industry. It took time for the realisation to click that like banking which was deemed a passive sector but that in last 30 years could dictate its own growth in cashflow and profitability (nominal) to much faster than underlying general economies, so too did computing technology force the pace and then also replace or displace segments of other industries, which was the real cost to other industries - not just as growing shares of all other industries' and governments' procurement budgets, and in case of banking as financial management costs growing faster than value-added.

Environmental industry, assuming it must be faster-growing than most others, is nonetheless held back by government austerity and by other industries' low capital investment and by banks continuing reluctance to grow long term lending when they continue to be uncertain about their own long term finance, operating costs and stickiness of deposits. Hence, growth continues to be dependant on regulation. For a sea-change in environmental industry a change in perception is required that so far we only see in large-scale enterprises devoted to alternative energy - a new perception of environmental industry as fast-growing profitable investment. Sadly, when this happens, of course, the pioneering quality of the industry will change -much like when hippies discover unspoilt beautiful beaches and islands only for them two decades later to be covered in tacky hotels, apartments, pubs, shops and eateries?

It is an interesting topic to imagine how the environmental industry will change once it is not longer pushed by government but led by profit-hungry 'free' enterprise?  On the one hand, solving climate warming in time may require capitalism to embrace it venally for the usual 'gold-rush' reasons, and, on the other hand, how will the quality be changed and socially desired outturns be distorted and subverted. We see early signs in environmentally responsible motor-vehicles, in biodiesal feed plantations causing deforestation and threats to food and biodiversity, and in wind and solar power packages for households attracting entrepreneurs only because there is money to be made.

World environmental industry has been estimated at about $0.8tn (2010) annual turnover (one third in USA, 30,000 firms), computer hardware annual sales about $0.5tn (one fifth in USA, 100,000 firms).  Note these numbers of firms are relatively small numbers given that over 90% will be tiny in size.  The IT industry in total maybe $4tn annual sales worldwide. IT segments are growing at different rates, in aggregate at about 5.6%, considerably faster than world GDP (3 to 4%). Enivironmental industry should be faster growing - let's imagine at 7% or doubling every decade (similar pace to world tourism). Countries have embraced this as part of their general industrial growth strategy e.g. China, Germany, Malaysia, Brazil i.e. among the world's main export-led economies, plus others of course. There is a race competition to seize world market shares.

It seems to me therefore that when the narrow-minded self-serving capitalist business ethics crash into socially-responsible morality that environmentalism changes - probably already very changed from how it seemed to be thirty years ago.  In some areas like oil & gas there are environmental health, safety and even wider social investment standards, but only with a quality of professional ethics. Many standards and morality guides exist, some as good practise, others as matters of law and procedure. But, is there an urgent need for something far more comprehensive, equivalent to a UN declaration or EU and other international law with world status?

AUGUR

A world-wide group of economists and others worldwide, led by a group of EU macro-economists - who work like a mini-UN macro-research with everything integrated across all of  the world's political-economy, fully empirically expressed with dynamics lacking from World Bank Model - the only truly comparable economic modelling of the world as a whole. I worry such a wide-ranging and intelligent project may not be repeated - and we are very fortunate to have this depth, scale and realism, with the results from a main model plus countless supporting models.

The most recent work shows alarmingly how the convergence that defined the EU hitherto has inverted to become a divergence over the next two decades. That alone endangers the sustainability of the EU project, risking it becoming exposed publicly as a false prospectus in the coming years compared to its founding ambitions and original benefits.

AUGUR REFERENCES

WP1 - macro-model of the world's regions, see http://www.augurproject.eu/spip.php?article74

plus 12 papers supporting

WP4  global development, demography, migration see  http://www.augurproject.eu/spip.php?article4

7 supporting papers including about the world food crisis

WP5 energy papers and models see  http://www.augurproject.eu/spip.php?article5

with 7 papers and masses of data and forecasts covering all major energy questions.

WP3 innovation a- as a servicend technology, see http://www.augurproject.eu/spip.php?article3

with 11 papers

WP7 well-being and living conditions see http://www.augurproject.eu/spip.php?article7

with 5 supporting analysis papers

WP6 governance and integration see http://www.augurproject.eu/spip.php?article6

with 11 supporting papers

WP8 economy and politics, see http://www.augurproject.eu/spip.php?article8

with 5 supporting papers

WP2 - world financial markets and regulation see http://www.augurproject.eu/spip.php?article2

with 21 papers

 

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