Following on from the last post, I thought I’d give some thoughts on the negative effects of the crash (I’m trying to avoid that terrible term “credit crunch”) on the environment.
In the realm of public concern, and in the marketplace of apocalyptic fears, climate change is now sitting one rung lower. The economic problems are far more immediate and pressing, and it is easy for long-term considerations to be swept aside. Which possibility worries you more – rising sea levels or losing your job?
In the last few days, the green lobby is clambering to recover lost ground, but has been making little impact on the daily news cycle. One tactic is to draw a parallel, in ecological terms, between the culture of financial indebtedness and our propensity to draw on more of our resources than our environment is capable of delivering in the long term (making us “ecological debtors”). This is the approach of the WWF (et al) Living Planet Report*. Good luck to them, but I’m not sure they’ll make much ground at the moment – like John McCain, the media and the public can only concentrate on one crisis at a time.
At the same time, the Green Tech industry is going to suffer. Public sentiment and government regulation may be important in driving innovation, but it is up to business to deliver it. Although some measures, like reducing unnecessary waste and improving efficiency come for free or at a low cost, most energy saving or renewable energy improvements require investment. They involve a cost in the short term with probable medium or long-term paybacks. Anything that affects business confidence and the availability of credit will affect this industry as much as any other, and possibly more. The prospects of some large renewables ventures have already been dealt a big blow:
With banks reluctant to lend and their stock prices tumbling, many green-energy concerns are struggling to find the long-term funding they need to expand in a capital-intensive industry.
This may sound crazy, but another reason why the current troubles are bad news is that oil will be cheaper. Without wanting to discount the economic pain and suffering that high oil prices have caused recently, the positive side of these high prices is that it has helped us to understand that fossil fuels are a finite resource, and it is stupid for us to be so utterly reliant on them, and at the same time to be squandering them so thoughtlessly. My feeling is that high oil and gas prices have been more effective in inducing us to reduce our fossil fuel consumption than all of the scientific warnings about climate change. If prices stay low over the coming years, we may have the opportunity to test that theory.
But they won’t. I’ll explain why in my next post.
But back to the original question – recession, good or bad? I’ve been hedging my bets a little, but ultimately I have to say…
Bad. As much as it disappoints me to say it, environmental issues are treated as a kind of luxury item – an optional extra when times are good, but the first out the door when times are bad. It’s tough times ahead for bankers and environmentalists.
*Thanks to Dave for the link