When climate change reform meets a slowing economy

• Sunday Age, November 30, 2008
• http://www.theage.com.au/opinion/editorial/when-climate-change-reform-meets-a-slowing-economy-20081129-6nea.html?page=-1

THIS week in Poznan, Poland, the world's environment ministers are meeting to begin negotiations for a new treaty to reduce global warming. They are doing so in an unstable economic climate, with more countries moving into recession and unemployment rising. Traditionally, when times are tough, environmental issues take a back seat. In the words of Barbara Helfferich, the European Commission spokeswoman on the environment, "investing in reducing emissions is more difficult to do in times of economic downturn than when you have money to spend". But as the dangers of climate change become more apparent, our political leaders cannot afford to stick to old patterns. This time, they cannot pretend that the health of the economy does not ultimately depend on the health of the Earth.

Fortunately, US President-elect Barack Obama is backing the long-term view. Although he has not released the details of his proposed economic stimulus package, he has called upon America to produce "wind farms and solar panels, fuel-efficient cars and the alternative energy technologies that can free us from our dependence on foreign oil and keep our economy competitive in the years ahead". In other words, Mr Obama intends to pursue what Ms Helfferich describes as a counter-intuitive strategy. In her words: "Because there is an economic turndown, it is just the time to tackle the transition from a high-carbon to a low-carbon economy."

It is to be hoped that Mr Obama sticks to his plan, because the world is at a critical moment. Although no government has officially repudiated climate change goals, Italy's Environment Minister, Stefania Prestigiacomo, said last month that profound changes were needed in the European Union climate change package because of the global economic crisis. Poland, a coal-based economy, has expressed similar concerns. Some industrialists have also become hesitant about green investments: T. Boone Pickens, an Oklahoma oil tycoon who leased thousands of hectares in Texas for a giant wind farm, has delayed the project. Another possibility is that the slump will halt investment generally, which may reduce emissions (and employment) in the short-term, while doing nothing to change the way energy is produced.

The challenges are enormous. According to the United Nations, 40 per cent of the world's power-generating capacity has to be replaced in the next five to 10 years. Earlier this month the International Energy Agency reported that the pace of growth in India, China and other developing countries meant greenhouse gas emissions were proliferating faster than any efforts by Western economies to reduce them. The agency said the five major emitters — China, the US, the European Union, India and Russia — had "to ensure secure energy supplies and to curtail rising emissions" despite the pressures of the financial crisis.

In Australia, Treasurer Wayne Swan has pointed out there is only a slight difference in the cost of reducing emissions by 5 per cent off 2000 levels by 2020, or by the scientifically responsible figure of 25 per cent. Last week the bank HSBC released a study of 12,000 respondents in 12 countries, including China, Brazil, India and the US, on attitudes to climate change. It showed almost twice as many people wanted governments to invest in ways of curbing greenhouse gas emissions than supported the Kyoto protocol. The world is waiting for leadership in Poland this week.