A basic misunderstanding of our global governors in the IMF, World Trade
Organization and other still-emerging institutions, is to believe that abstract economic theory is more important than the real world. We are supposed to believe that encouraging the unrestricted flow of commodities and money across national borders will meet all our human needs. A commitment to these abstractions still remains the test of good international citizenship for governments.
Yet the real world is about to generate what economists call “externalities” on such a huge scale, as a result of the waste from how the world does business, that they will ridicule our faith in the compromised market mechanisms at the centre of our economic system.
After the middle of this century the economic cost of global warming stands to
surpass the value of total world economic output, according to the best guesses of the insurance industry. Before that, in 25 years time, half of all people living in developing countries will be at risk from unnatural disasters.
How we manage and adapt to global warming is going to become the organizing principle of the world economy, either through choice or by the climate’s imposition.
