GDP

(1/9/2009) - One of the most popular arguments against a carbon tax, cap-and-trade system, or any other government-run program that would attempt to help companies internalize costs that they would otherwise externalize, is that such programs would hurt the economy by increasing businesses expenses on non-productive activities, therefore dampening aggregate economic growth (or, in our present situation, deepen the recession).  In short, it will “hurt the economy.”

On the face of it, this is an accurate argument.  Of course, one could accept it and still make the case that the sacrifice is worth it.  But as long as people in favor of internalizing the costs of damaging the environment do not control the discourse and change it away from "the sacrifice is worth it," they will be fighting an uphill battle. 

Shifting the Debate Away from “the economy”

I believe that it is wiser to reject the premise of the argument entirely.  When talking heads and politicians discuss the “economy,” they are inevitably referring to the Gross Domestic Product (GDP), the “total cost of all completed goods and services produced within the country in a stipulated period of time.”