Recession In, Environment Out?

Is environmental spending just a luxury good?

How quickly things change within the passage of time. Months ago, global warming and the environment was the talk of the town. The very first article on The Lookout, incidentally, commented about this year’s G8 conference, where leaders convened to discuss on how to tackle environmental issues together. Now, everyone’s suddenly scrambling for their wallets and the environment is forgotten. When the presidential campaign was once about the “healing” of the planet, now its all about how whether you can trust Obama or McCain to put food back on the table. 

In recession no one can hear you scream. Or pollute, for that matter

This is especially so since this crisis affects the lower and middle-income groups the most. Practically speaking, when there are bills to pay and a possible retrenchment to worry about, paying more premiums for goods that “help the environment” suddenly feel like a luxury.

In short: why should I care about rising carbon dioxide levels when I have a family to feed?  

This spells bad news, because it is incidentally these lower to middle income groups that contribute to most of world’s greenhouse gas output. For the households in the developed world, “green goods” like hybrid cars or organic foods no longer affordable. And as primary and secondary industries begin to cut back costs, its clear that environmental standards will be the first to be compromised. 

Moreover, with credit lines contracting, this means alternative energy companies — the heart of the solution — are less able to raise capital to sustain research and development. Banks, looking to cut back on loans, are unlikely to lend as freely as they did before, but not until the whole crisis blows over. Until that happens, researchers like Ron Surdam will have to halt their programmes. 

On the upside, a slowdown in growth will also cause demand for fossil fuels will also fall, reducing emissions for a time. This however, is only a small consolation. This is because the global warming problem needs a sustainable, not a temporary solution: improvements to technology that will allow alternative energy sources to compete with fossil fuels in terms of cost and effeciency. But scientists will tell you there is a long, long way to go before this point is reached, and this was even before the crisis occured. 

A ray of hope though is Obama and his talk of the “Apollo Project“. Unveiling it in his interview with Time, Obama briefly outlined how he would use new energy as a means to drive America’s economy in the coming years, with consumption bubble finally burst. This sounds good in theory, but many challenges await. Firstly, research and development requires years before any dividends are paid. If new energy is to be a part of the US, can the public wait before this breakthrough is reached? Furthermore, old habits die hard. America, the leading producer of greenhouse gases, will certainly not be able to mend its ways overnight. The decision to “go green” requires a deal of commitment – such as a willingness to change spending habits, deal with possible inconveniences – a decision i’m not sure many American households are willing to make. 

Taking a step back, maybe its just a matter of time before global warming returns to the table. Then again, now, not later, is the best time to test the worlds’ leaders resolve about the environment. Based on what happens from here, it will be clear whether they genuinely see global warming as something important, or just another coffee-and-tea item to discuss when times are good.

-A.S.