Thursday, June 14, 2007


Early this morning, I came across the article in Financial Times written by Vaclav Klaus entitled Freedom, not climate, is at risk.

One of the major concerns in debating the future of global warming is that the supporters of heavy regulation seem to instinctly ignore the economic fundamentals. In the last decade, there have been numerous panel groups deciding how to orient to cure global warming. Nearly every proposal and recommended solution fetched the regulation of industries to cut the emissions as much as possible.

The suggestions of the environmentalists offered poor track in understanding how economic behavior really works. In recent years, world markets boomed from the emergence of new technology containing efficient, innovative and environmentally-friendly methods determining the course of production. Consumers always want new products and the only way to deliver them is to use the rock-bottom incentives to provide the best product at the best price. Old and rugged technologies were once the symbol in centrally-planned economies, causing high costs and truly poor quality. However, greater incentives to produce and supply over the course of time and supply-side economic measures such as deregulation, the liberalization of product markets and the enforcement of competitive law contributed to the diffussion of efficient technologies with an aim to control cost shocks and provide the betterment of product quality.

New economy and the "so-called" dot-com boom revolutionized the market by providing new technologies at far more efficient level. Consequently, the economy's transformation from manufacturing to services brought the greatest industrial restructuring we have ever seen. New economy is actually the reason the the share of industry in the GDP fell and consequently the amount of gas emissions as well. All kinds of "scientific consesus" are nothing else but a huge political infusion into scientific work.

Professor Richard S. Lindzen from the Massachusetts Institute of Technology brilliantly captured the essence of global warming histeria:
"Future generations will wonder in bemused amazement that the early 21st century’s developed world went into hysterical panic over a globally averaged temperature increase of a few tenths of a degree, and, on the basis of gross exaggerations of highly uncertain computer projections combined into implausible chains of inference, proceeded to contemplate a roll-back of the industrial age".

The supporters of "black"future environmental scenario suggest that we should dramatically change our lives by cutting the energy consumption expenditure and change it with new energy resources. Have they provided the positive impacts of alternative energy resources infecting the pollution?

The implications of environmental intervention stretch beyond the edge of our imagination. If such measures were introduced, our living standards would probably fell dramatically and so would GDP growth decline as well. Assume that you're an entrepreneur with a certain kind of technology. You know that this particular technology is the most efficient in the market giving you high yields of return. And then imagine that government said that "you must use another kind of technology" by which you cannot sufficiently generate the returns you get back from the technological combinations you carefully chose. Understanding consumer behavior is essential for the entreprise to boost the supply with the best quality and the lowest possible price yielding competitive margin. So in the long run, you'd forced to adapt a new kind of technology which completely distorts the stock of your products which consumer deny to buy. Your income, value added and profits would fall and how would then your enterprise be competitive and socially responsible if it didn't generate profit?

Following the pursuit of global competitiveness, we will enjoy far better technological conditions in the future, bringing new cutting-edge concepts into our lives and sharply improving our life conditions. Taken reasonably, it's quite pathetic to claim that gas emissions endlessly change weather and climate behavior. In fact, the empirical evidence and computer projections displaying the course of intensity of global warming over time is very poor, putting politicised scientific consesus on ice.

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