Better Economy, Better Environment! Environmental Protection needs Growing Capitalism!

Brazilian space agency reported the 3,069k㎡ Amazon deforestation in the first half of this year. Not only environmentalist activists but also major firms of international finance are furious at this immense lose. This immense deforestation was caused by the rise of various illegal economic activities due to this year's severe economic downturn. These criminals extract their resources for illegal trades from those places where economic regulations discussed through the discussion of politicians, financial brokers, and various private industries.

The economic regulations are established by means of the equilibrium point of the short term gains and the long term sustainability which majority capitalist politicians and private agents agree with. Nowadays, many of these politicians and private agents are aware of the external costs of their economic activities, and they cannot live without a social tie with the local community. As Aristotle said "Human-beings are naturally social: The one who is not social at all is either a beast or God". None can live without a mutual agreement with the others living in the community.

What those who are from these major international funds are disappointed with the current situation is that they have lost their massive financial benefit from that deforestation. These forestry resource as the commodity which requires to be managed carefully so the price of these commodities are priced carefully enough to mitigate the future loss of our living environment sustainability. In addition, people in the world are now aware of environmental carefulness of private firms extracting this resource so that the excess extraction of resource induces the substantial loss in the stock value, which those funds investing to these private firms incurs an immense financial loss.

Furthermore, this matter is also related to the emission tax trade. The current capitalist economy encourages the emission trade between countries and regions in order to balance the ecological footprints in the world environment. This taxation system attempts to restrict wasting environmental resources by not slowing down the economic development. The current illegal businesses causing the massive deforestation disturb the calculus of balancing the permission for extraction and the prohibition of forestry. The emission tax trade scheme is prepared for rewarding those who are ethically performing the extraction and looking after the sustainability at the same time.

It is permitted to extract a huge amount as long as they are obliged to pay for an equivalent immense tax compensating the loss. However, this obliged tax payment is ignored by these illegal businesses. It is about not only losing the tax revenue but also it derivatively means to penalise those who are ethically performing well. The reward for their ethical performance is relatively devalued against those who unfairly gain the resource by paying no penalty for it. This is why capitalist politicians, fund managers, and private manufacturing firms are furious at these criminals.

At the same time, these criminal have some reason d'etre to operate this illegal business. The root of all evil comes from the current economic downturn caused by COVID-19 pandemic. Because some firms have lost their business due to the temporarily but significant aggregate demand downturn, those who have technologies and labour resources start shifting from legal market to illegal or unethical (or often both) market which demand these production quality. This is why the aggregate demand management is crucial for not only supporting businesses but also preventing the aggregate supply materials switching from the ethical legal market to the unethical illegal counterpart.


On the other hand, the economic growth is important not only for the resource management purpose but also the environmentally friendly technology development. The lack of the aggregate demand decreases the revenue covering the cost for the innovation. When the aggregate demand level is enough, the disposable income is fulfilled enough to spend something a little bit more costly than the regular products so there is an enough opportunity for innovative products to be consumed. By contrast, when the aggregate demand is depreciated, consumers become reluctant to spend something authentic or innovative products whose price is higher than the other even though the price difference is a little bit.

For example, the plastic waste problem is highly emphasised in the global level so that the invention of the substitutes is highly urged. The severe ecological problem of plastic is that plastic is not biodegradable when it is disposed. When plastic is landfilled or sinks into the sea, it remains without being naturally rotten to cease. This is why there is a movement of banning or at least restricting the single use of plastic for disposable products.

Then, paper for various many substitute products is adopted because of paper's biodegradability as well as its processability. Nevertheless, the processability of plastic surpasses paper so that the disposable items made of plastic such as plastic straws used for drinking beverage is still cheaper and more comfortable to use than paper counterparts such as paper straws.

There is a paper product but yet it is difficult to be recognised as being made of paper. This kind of product is based on chemically processing papers. For example, there is a material which was used even before plastic was initially introduced in the world, and this material is manufactured by laminating papers dipped into chemical liquid to solidify its hardness and durability. This example material represents as one of substitute materials of plastic after its various usages were replaced by plastic. This movement is a typical example of "visiting old、learn new".

The fundamental issue of this alternative product made of chemically processed papers is that its unit marginal cost is significantly higher than plastic even with some public subsidies provided for this manufacturing process. This product is critically time consuming for its lamination process in the chemical liquid. Furthermore, the processability of this product is critically lower than plastic despite its higher hardiness than plastic. The sales of this processed material has been relatively higher during economically stable period meanwhile the sales substantially dropped after the business cycle falls into the current downturn due to COVID-19 pandemic.

All in all, sales of the environmentally friendly items is pro-cyclical to the (legal) business cycle and counter-cyclical to the illegal (Which is often unethical) market business cycle . Unlike many anti-capitalist socialist environmental activists rant, capitalism has evolved to take an external factors of economic activities such as emission of pollution and environmental impacts as seen in the aforementioned stories. This is why the aggregate demand stimulus and its management are non-negligible, and environmental protection requires a constant economic growth.