Green Capitalism FAQs
What exactly is productivity?
Productivity represents improvements in ways of doing things, which is the ultimate source of economic growth and higher living standards.
What is globilisation and why do we have it?
Globalisation promotes the free movement of goods and finance around the world to increase competition and improve productivity.
What is the difference between GDP, GNP and GNI?
Gross Domestic Product, Gross National Product and Gross National Income are slightly different ways of calculating our economic activity.
Is GDP growth the same as inflation?
No. Inflation is simply the increase in prices and wages. GDP Growth is the increase in economic activity after excluding the effects of inflation.
How can we reduce population growth?
It will require long term re-education, stronger economies and improved social welfare in the developing world, removing the family tax incentives in the developed world and reducing the influence of religious leaders. Easy eh?
How does population growth impact our economy?
If population icreases by 10% then, all else being the same, an economy will increase by 10%.
What is the Big Mac index?
Every few months, The Economist magazine compares the price of a big Mac in different countries around the world to give an indication of the true exchange rate to the US dollar
How does inflation affect growth in GDP?
It doesn't. If it did, Zimbabwe would have the biggest economy in the world.
What is the human Development Index?
The United Nations produce this for every country. It combines GDP per person plus health and education indicators to provide a comparison between countries of quality of life rather than just the standard of living.
Where does export income go?
Export income goes to the companies that made the exports, not the government. It is offset by imports that the company then has to pay for with the balance used to pay taxes, employees, local purchases and dividends, some of which goes back overseas.
What is 'Peak Oil' and are we there yet?
Peak oil is the point in time when we cannot increase the volume of oil being extracted. The International Energy Agency believes that we may have hit peak oil in 2006.
What will be the impact of Peak Oil?
As demand for oil continues to rise there will not be sufficient being extracted to satisfy that demand. Prices will continue to rise and producer countries may start to hoard their oil.
How does a warmer planet affect our climate?
A warmer planet increases evaporation which dries the land and puts more water into the atmosphere. This extra moisture plus increased temperatures will cause bigger and more frequent storms.
How does a warmer planet affect sea levels?
A warmer planet will cause thermal expansion of the oceans, raising sea levels. Land based melting ice will raise sea levels far more.
How can governments stimulate an economy?
Through 'Fiscal Policy and through 'Monetary Policy'
What is Fiscal Policy?
Control of the economy through taxes and government spending.
What is Monetary Policy?
Control of the economy, primarily through the Reserve Bank changing interest rates or by changing the money supply.
What is money supply?
The total amount of money in an economy, usually total currency and money on deposit.
What is quantitative easing?
Increasing the money supply by 'printing money'. These days done through the banking system.
Why have quantitative easing?
The extra cash 'printed' by the government enables banks to lend out more money, which boosts demand for goods and services which increases economic activity.
What is a budget deficit/surplus?
Simply the difference between taxes raised and money spent each year.
When should governments have debt?
When they are using it to invest in long term infrastructure.
When should governments not have debt?
When they are using it to fund continual budget deficits.
In the last 12 years the global economy has doubled to US $70 Trillion.
During that same time oil is close to peaking, fresh water demand has ballooned, waste mountains have piled up and greenhouse gases have driven changes to our climate.
If we continue at that growth rate the global economy will be US $700 Trillion per annum by 2050 and over US $11,000 Trillion by the end of this century.
Can we have a global economy 160 times bigger than today?
- The pessimists' view is that we cannot. We will consume and pollute ourselves to a life of meagre subsistence - "Living in caves and eating moss".
- The optimists' view is that new forms of energy and new technologies will enable us to continue to grow for ever without limit. "Technology will solve the problem".
- The reality is, of course, somewhere between the two.
That 'somewhere' I call Green Capitalism. 'Capitalism' because that really is the only economic game in town. 'Green' because that is the only long term future for us.
My role is to help business understand why, when and how green capitalism will impact them. I help three ways:
- On the left of this webpage you will find articles on Green Capitalism - explaining the good and the bad of our current economic model, what impact future economic growth will have on our planet and what we need to put into place for our economy to become truly sustainable.
- On the right of this webpage are Frequently Asked Questions on our journey to Green Capitalism.
- Finally, below you will find my contact details if you want me to come and talk to your organisation or if you have any 'infrequently asked questions'.
Keith Mcilroy
+61 (0) 407 287 329
keith@keithmcilroy.com