We've all heard of inflation and deflation. Some of us know about and kind of understand stagflation. Now economists have come up with a whole new 'flation' to terrorize your pocketbook: ecoflation. Simply put, it's the rising cost of doing business at a time when earth's climate controls are on the blink. According to some, businesses that don't work to make their practices more sustainable and climate conscious may see their profitability erode quickly in the next5-10 years.
If you're wondering just exactly what kinds of costs will go up as climate change occurs, the answer appears to be primarily -- taxes. As countries pass new emissions control legislation, it's expected that companies in pretty much every large economy will be forced to pay a premium for the emissions they create.
That means that many of the companies that shipped off all of their manufacturing facilities to other countries in order to take advantage of extremely cheap labor -- those guys would be paying through the nose. Some companies are already working on how to keep their margins in tact should a carbon tax be passed by cutting their reliance on big carbon no-nos like oil-based plastics.
The big question is, could the same companies really be profitable if they had to pay US workers at a bunch of regional factories? Cutting down the distances a product is shipped is eco-friendly, but is it really profit-friendly? Do we really want to pay the noticeably higher prices that will result?
So, if at first 'ecoflation' sounded like an ecological result of too much consumption -- that's really only accounts for a small part of the bump in expenses. A more organic type of ecoflation could be observed last year when oil prices spiked, seeming to indicate that demand had outpaced humanity's ability to pump the stuff. The world would then collapse into chaos, cannibalism, dog and cats living together, just as Ted Turner predicted.
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