Worldwatch Outlines Plan for Sustained Eco-Based Economy

THE White House energy proposal, sent to Capitol Hill this week, stresses increased production over efficiency and conservation, traditional supplies over renewable sources, and market economics over government intervention. It is in sum: more of the same with a nod to environmental concerns and geopolitics.

A very different vision is presented by the Worldwatch Institute, a private research organization whose annual ``State of the World'' reports are read by governments and international agencies worldwide.

The essence of this year's Worldwatch report is that global economic progress in recent years (as measured by traditional indicators like output of goods and services) masks consistently negative environmental signs. These include annual forest losses of 42 million acres (an area the size of Austria), the loss of 24 billion tons of topsoil each year, and the yearly spewing of 6 billion tons of carbon dioxide (the main greenhouse gas) into the atmosphere.

At the same time, the rate of population growth has begun to rise again after declining for about a decade and a half. This has put greater demand on sources of food and energy.

``The result is a disguised form of deficit financing,'' warns Worldwatch president Lester Brown, that will eventually lead to economic collapse. ``In sector after sector, we are consuming our natural capital at an alarming rate.''

The institute warns that business as usual on energy would mean reliance on Persian Gulf oil would eventually increase from 26 percent today to more than two-thirds. It would also necessitate the building of three times as many nuclear power plants over the next 30 years as were built in the last 30.

The Bush administration does favor more nuclear power, but wants to reduce dependence on foreign oil by tapping new domestic sources.

Worldwatch says now is the time to switch to renewable energy sources, including solar, wind, geothermal, biomass, and hydropower. (Recent studies done for the US Energy Department show renewables could supply 50 percent to 70 percent of US needs by the year 2030. The studies say renewables would also create more jobs than traditional energy sources while sharply curtailing carbon-dioxide emissions.)

The technologies are at hand, proponents say, but the shift will require major policy changes.

This means cutting current subsidies for fossil-fuel production, restructuring utilities to encourage energy conservation, and taxing fossil fuels ``so that prices reflect full security and environmental costs,'' the report says.

The Congressional Budget Office (CBO) has estimated that a phased-in ``carbon tax'' on fossil fuels could generate $120 billion in annual revenues, offsetting 30 percent of federal income-tax receipts - which in turn could be lowered so that the overall tax burden remains the same.

Meanwhile, according to the CBO model, carbon emissions would be 37 percent lower than now projected for the year 2000, and energy efficiency would improve 23 percent.

Worldwatch researchers recommend similar taxes on pesticides, hazardous wastes, and the overpumping of ground water.

``Taxing products and activities that pollute, deplete, or otherwise degrade natural systems is a way of ensuring that environmental costs are taken into account in private decisions, such as whether to commute by car or via mass transit,'' they write.

Worldwatch stresses that such a plan is more efficient than regulatory standards and, in fact, fits the free-market mold favored by laissez-faire economists.

``Taxes can help meet broad environmental goals efficiently,'' says the report, ``since they adjust prices and then let the market do the rest.'' When Britain imposed a higher tax on leaded gasoline in 1989, for example, the market share of cleaner unleaded fuel rose from 4 percent to 30 percent in one year.

The challenges in moving to a more environmentally friendly economy are many, proponents acknowledge, including the need for strong political leadership, changes in consumption patterns, and considerable international cooperation.

For example, third world debt may need further restructuring so that developing countries are encouraged to conserve natural resources rather than sell them off to get quick revenue.

The World Bank and regional development banks (which usually fund large, capital-intensive projects like dams and roads) would need to reform lending practices to encourage conservation over ecologically damaging development.

``Achieving an environmentally sustainable global economy is not possible without the fortunate limiting their consumption in order to leave room for the poor to increase theirs,'' the report states.

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