Amid the pressures of the global financial crisis, some ask how we can afford to tackle climate change. The better question is: How can we afford not to? Put aside the familiar argumentsâ€”that the science is clear, that climate change represents an indisputable existential threat to the planet, and that every day we do not act the problem grows worse. Instead, let us make the case purely on bread-and-butter economics.
Amid the pressures of the global financial crisis, some ask how we can afford to tackle climate change. The better question is: How can we afford not to?
Put aside the familiar argumentsâ€”that the science is clear, that climate change represents an indisputable existential threat to the planet, and that every day we do not act the problem grows worse. Instead, let us make the case purely on bread-and-butter economics.
At a time when the global economy is sputtering, we need growth. At a time when unemployment in many nations is rising, we need new jobs. At a time when poverty threatens to overtake hundreds of millions of people, especially in the least developed parts of the world, we need the promise of prosperity. This possibility is at our fingertips.
Economists at the United Nations call for a Green New Dealâ€”a deliberate echo of the energizing vision of United States President Franklin D. Roosevelt during the Great Depression of the 1930s. Thus, this week the United Nations Environment Program will launch a plan for reviving the global economy while dealing simultaneously with the defining challenge of our eraâ€”climate change.
The plan urges world business and political leaders, including a new U.S. president, to help redirect resources away from the speculative financial engineering at the root of today's market crisis and into more productive, growth-generating, and job-creating investments for the future.
This new Green Economy Initiative, backed by Germany, Norway, and the European Commission, arises from the insight that the most pressing problems we face are interrelated. Rising energy and commodity prices helped create the global food crisis, which fed the financial crisis. This, in turn, reflects global economic and population growth, with resulting shortages of critical resourcesâ€”fuel, food, and clean air and water.
The commingled problems of climate change, economic growth, and the environment suggest their own solution. Only sustainable developmentâ€”a global embrace of green growthâ€”offers the world, rich countries as well as poor, an enduring prospect of long-term social well-being and prosperity.
The good news is that we are awakening to this reality.
We have experienced great economic transformations throughout history: the industrial revolution, the technology revolution, and the era of globalization. We are now on the threshold of anotherâ€”the age of green economics.
Visiting Silicon Valley in California last year, I saw how investment has been pouring into new renewable-energy and fuel-efficiency technologies. The venture capital firm that underwrote Google and Amazon, among other archetypal entrepreneurial successes, directed more than $100 million into new alternative energy companies in 2006 alone.
In China, green capital investment is expected to grow from $170 million in 2005 to more than $720 million in 2008. (In just a few short years, China has become a world leader in wind and solar power, employing more than a million people.) Globally, UNEP estimates that investment in low-greenhouse-gas energy will reach $1.9 trillion by 2020.
The financial crisis may slow this trend. But capital will continue to flow into green ventures. I think of it as seed money for a wholesale reconfiguration of global industry.
We can already see its practical expression. More than two million people in the advanced industrial nations today find work in renewable energy. Brazil's bio-fuels sector has been creating nearly a million jobs a year. Economists say that India, Nigeria, and Venezuela, among many others, could do the same.
In Germany, environmental technology is expected to quadruple over the coming years, reaching 16 percent of manufacturing output by 2030 and employing more people than the auto industry. Mexico already employs 1.5 million people to plant and manage the country's forests.
Governments have a huge role to play. With the right policies and a global framework, we can generate economic growth and steer it in a low-carbon direction. Handled properly, our efforts to cope with the financial crisis can reinforce our efforts to combat climate change. In today's crisis lies tomorrow's opportunityâ€”economic opportunity, measured in jobs and growth.
Most global CEOs know this. That is one reason that businesspeople in so many parts of the world are demanding clear and consistent environmental policies. It is also the reason that global companies like General Electric and Siemens are betting their future on green.
But it is important that the global public recognize this fact, perhaps nowhere more so than in the United States. When the next American president takes office, voters and elected officials alike should be reassured by studies showing that the United States can fight climate change by cutting emissions at low or even no cost, using only existing technologies.
We know that the poorest of the world's poor are the people most vulnerable to climate change. They are also the most vulnerable to the shocks of the financial crisis. As world leaders, we are morally bound to ensure that solutions to the global financial crisis protect their interests, not just the citizens of wealthier nations. Those left behind by the previous boomâ€”the so-called "bottom billion," living on less than $1 a dayâ€”must be brought into the next economic era.
Again, a solution to poverty is also a solution for climate change: green growth. For the world's poor, it is a key to development. For the rich, it is the way of the future.
Â© 2008 Project Syndicate. Republished with kind permission.