Gorgon makes our children $50 billion poorer

22 August 2009

Media Releases 2009

Non-renewable resources can only be used once. When they are gone they’re gone.

‘A major defect in our national accounts misleads us into believing we become richer by exploiting non-renewable resources such as the gas from the Gorgon field’ said Dr Coulter today.

‘Who ever heard of someone becoming richer by taking money from their bank account?’ (Amory Lovins) Yet this is what we are now doing with our capital assets; robbing our descendants bank account.

‘If a private company sells a factory building or any other item of capital equipment it deducts the value from its capital account and adds the value to its cash flow account. If it were to show the second of these entries without revealing the first and claim this transaction to its shareholders as income, such a company would very soon be before the court.

‘Nationally we should show the sale of our non-renewable resources in an exactly analogous way. When the gas is gone we will be $50 billion poorer in terms of a capital asset. Along the way $50 billion will have appeared as an addition to GDP, the national cash flow account.

’A fundamental fault lies in the debt basis of our economic system. Companies must exploit resources at a fast rate in order to pay the banks, finance companies or share holders from whom they have borrowed money to exploit the resource.

‘Before the end of this present 21st century all non-renewable energy resources together with many other essential resources such as phosphorus for food production will have become so rare and expensive as to be essentially no longer available.

‘When human populations were small and each human’s demand on resources tiny, it did not matter that we kept misleading accounts. The scale of total human demand was minuscule compared to the size of the reserves. The world could be considered empty. This is no longer the case. We now live in an over full world in which the scale of human environmental demand is unsustainable.

‘It is urgent that we change if our children are to have access to any of the vital resources that we now exploit so profligately. A start must be made by keeping proper national accounts’ concluded Dr Coulter.

For further information or comment:

Dr John Coulter 08/8388 2153


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