Good Report

Well done to these guys.

Installing solar panels on the roof, which can cost up to £5,000, would take as long as 208 years to pay back the cost.

However, owners of a terraced house who installed cavity wall protection would see a return on their investment in as little as three years.

The sums have been calculated by the Royal Institution of Chartered Surveyors, which has published a \’Greener Homes Price Guide\’. The guide warns that many homeowners are being duped into making radical changes to their home that will not save them money and will do little to reduce their carbon footprint.

Some things are sensible to do. Others aren\’t.

But how do you know which is which?

Well, even if you\’re the most green of greens, you want to do the things which use fewer resources than the alternatives. That\’s rather the point actually, to lightne one\’s footprint on Gaia\’s face. But how do you work out what uses fewer resources?

Well, that would be our old friend cost benefit analysis. And, rather than having to do lengthy calculations, for almost all of us almost all of the time that would mean simply looking at the financials. If it costs more to do than it saves then it\’s using more resources, not fewer.

There are times when it isn\’t quite this simple (when an externality isn\’t included in the prices) but for almost all of us almost all of the time the simple answers that markets give us work perfectly well. Expenses equals resource use.

6 thoughts on “Good Report”

  1. “If it costs more to do than it saves then it’s using more resources, not fewer.”

    If price of final good indicates resource use, doesn’t GDP growth equate to resource use growth?

    Tim adds> No, because GDP does not measure prices, it measures value added.

  2. What is the point of cavity wall protection? No one will be able to see my sacrifice to Gaia. I need big visible displays of my Gaia worship such as solar panels, wind turbines, and a Prius.

  3. Eh? As far as I know, GDP can be calculated either by adding up wages and profits, or by adding up the price x quantity of final goods, the price of the final good reflecting all the value-add from each intermediate good and input itself. Inputs are not absent from GDP – oil production and mining form part of GDP don’t they? I think you only subtract off the input if the country in question imports its inputs, where GDP will clearly differ from just the price of final goods, but global GDP equals the global price of final goods. I could be wrong.

    Anyway, that’s by the by. You’re the one arguing above that “expenses equals resource use”, not me, and I was trying to point out that’s inconsistent with your GDP growth does not equal resource growth line. For it to be true that the economy can grow without resource use growing, expense must not equal resource use, because you need (okay, global) expenditure to grow without resource use growing.

  4. Kit,

    It’s reckoned that one of the reasons that the Prius outsells the Honda Civic Hybrid is precisely for this reason – unless you get close up, you can’t tell that the Honda is a hybrid.

  5. unless you get close up, you can’t tell that the Honda is a hybrid.

    Sad. The Honda is a nice looking car and the Toyota ….. the less said the better. But Greens are into hair shirts so..

  6. Tim, the price does indeed capture ‘resource use’ but isn’t (some) greens’ point that some resources should be treated differently to others, i.e. resources such as labour or capital inputs should be treated as having less intrinsic worth/value than ‘natural’ resources?

    It is this intrinsic value that is supposedly not captured in the price. Such an argument opens up a whole wealth of environmental ethics debate (most of which I consider to be utter toss, but is something that I think should be considered/addressed when talking about these issues).

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