Is a recession good for the environment?

Posted on October 13th 2008

Posted by Ben 

As the spectre of a full blown global depression looms, and the recession bites, the European Commissioner for Enterprise and Industry, Günter Verheugen, has said that energy-intensive industries could receive a huge cash boost from the European Commission in a move to protect Europe’s industrial sector from world recession. Within weeks the EU is to debate whether to allow European industrial giants tens of millions of pounds off carbon allowances they have to buy as part of the Emission Trading Scheme (ETS). The ETS is the largest emissions trading scheme in the world and is a pillar of EU climate policy. It covers more than 10,000 installations in the energy and industrial sectors, collectively responsible for close to half of the EU’s emissions of carbon dioxide and 40 per cent of its total greenhouse gas emissions. Verheugen has said that European industrial powerhouses are refusing to invest in new plants and businesses in the eurozone because they claim ‘compliance costs’ caused by the emission trading scheme make new ventures too costly and that he fears a huge surge in unemployment if the world’s financial crisis escalates. He added that the allowance would be restricted to firms which invested in the most modern ’sustainable’ technologies. But the stark fact remains that this could be seen as putting economic concerns above environmental risks. Verheugen counters by saying that he doesn’t want to change the EU’s environmental objectives because he believes they are economically healthy adding that ‘doing nothing on the environment will cost more than taking action … [But] it makes no sense to force certain industries to leave Europe. They will take jobs and their pollution. As a result, there will be more pollution in the world and we will have fewer jobs. Deindustrialisation does not solve environmental problems.’

 

I noticed lots and lots of articles over the weekend about how the recession would affect us all - and how our habits might be changing on shopping, energy use, transport, gardening - even retail therapy! And I began to think - in the current climate (excuse the pun), is a recession a positive factor in the fight against climate change or a negative move? Interestingly, on Sunday evening in the UK there was a fascinating programme on BBC TV which looked at the history of the United States. The programme was called ‘The American Future; A History’ presented by Simon Schama and in one part looked at differing a perspectives of President Carter and President Reagan on climate change (back in the late seventies and early eighties), With Carter asking the US public to wake up the fact it was ‘living too well’ and Reagan taking a pro ‘economy first’ line, voters were asked to decide. We know who won that argument - step forward President Reagan! But with the American mid-west suffering from a nine year drought and with Florida, Louisiana and Texas repeatedly battered by tropical storms and hurricanes, both current Presidential candidates, Senators Barack Obama and John McCain, have been pro-environment with Senator McCain saying the fact of global warming ‘demands our urgent attention’. But the question remains - is the economy seen as more important than the environment in the USA? Is the economy still more important that the fight against climate change in the UK and Europe? Its an interesting debate. To be clear, I am NOT advocating a recession (!) and I also don’t purport to know any of the answers to the questions I pose below- but here are a few thoughts on clouds with a silver lining …… with a few more clouds without sliver linings:

 

- With the rapid rise in food prices there is a already a boom in people growing their own vegetables and allotments are thriving. BUT, in a recession, will people hard strapped for cash just buy the cheapest food possible - irrespective of the cost to the environment - how the food was farmed, what the carbon footprint is, and will worries about food miles become a thing of the past?

 

- The rise in oil prices certainly made consumers think carefully about travel, and traffic on Britain’s roads went down - and many people drove slower to conserve energy. Hooray - but oil and petrol prices are already moving downwards again - so will we see a commensurate rise in the use of the private car again? And will the cheaper price of oil stall research into renewable energies and sustainable power?

 

- Clearly the sale of new cars has been hit hard already with big big drop in new registrations. That’s not good for the economy but is this a good thing for the environment? Simply put, yes, but in the long term maybe not: Will manufacturers put research into more fuel efficient cars on hold and consumers resort to using older more polluting models? I don’t know, but one piece of good news -  bikes are back - and its hard to see a negative here - sales of bikes are up - and its healthy and green!

 

- The rise in petrol prices obviously put the focus on public transport - and this surely must be a good thing - but conversely unemployment and recession means reduced spending - including spending on travel. Many public services operate on thin margins and rely on public money for infrastructure spend. If commuters stop commuting as they lose jobs - they stop buying tickets - and of the government reins in pubic spending then infrastructure spending slows or stops - so will public transport also grind to a halt? Or will we all change our habits and move to public transport? And will the government embark on public spending programmes on infrastructure to stimulate the economy? It has happened before in a recession and wouldn’t this be a ‘win win’ situation for both the economy and the environment? 

  

 - Last one - foreign holidays and cheap air travel - are they a thing of the past? Or will we actually take more holidays to escape the grim reality of Britain in recession? We have already seen the demise of budget airlines like Zoom and travel operators like XL - and air travel is undoubtedly a contributor to global warming - but will we really move to a think local, act local … stay local society? Have we seen the demise of the global village? There is some good news in the festival world - despite economic turmoil the Iceland AirWaves festival is NOT cancelled and will go ahead between the 15th and 19th October as planned. The event’s organisers said: “In spite of economical difficulties in Iceland at the moment the festival will take place next week just like it has done for the past 10 years. The economical crisis does not affect the planning and promoting of the festival. Ticket sales have been going well and there are only a few tickets still available. Among the bands playing the festival this year are CSS, Vampire Weekend, Biffy Clyro,  Boy Crisis, Simian Mobile Disco, Pnau, Junior Boys and the Young Knives. The organisers have said that they are looking forward to lifting the spirits of the Icelandic people and would like to point out to international guests that as the Icelandic currency has collapsed, Iceland not only has the best beer in Europe it’s now also the cheapest“.Back to being serious - the last few years have seen a widespread acceptance of the realities and perils of climate change and global warming - but the question remains - will a full blown global recession marginalise the environment and put environmental concerns to the back of the queue for necessary change - or is there a silver lining in this cloud?  

If anyone has any thoughts on this please email them to agreenerfestival@aol.com

On the ETS see http://www.guardian.co.uk/business/2008/oct/12/europe-carbon-trading   Comment from Teresa Moore, Bucks New University

A lot of food for thought here Ben. Firstly, we have seen an increasing  range of  initiatives to combat climate change and global warming on different scales and  from various sectors of the global economy, the ETS scheme, more sustainable business practises, pressure from sectors such as the music industries, etc over the last few years. And true, these have been gathering momentum. But they have not been on a sufficient scale to make the difference that is necessary. What is needed is a paradigm shift in thinking and attitude to really make the difference which will change behaviours. Historically these paradigm shifts good or bad tend to follow a disaster or other major catalyst of some sort, from the plague in 13th century, not enough bods left so demand exceeds supply of labour hence, end of serfdom,   second world war shortages resulted  in a thrift economy, the invention of the internet and mass communication, and so on. All of these things have created change because they have had a major impact on economic conditions.

More recently we have had ten or more years of good times. The shift here has been in our collective attitude towards debt, we no longer save to afford luxuries, freely available credit fuelled by rising house prices means that we have felt that everything including the celebrity lifestyle is available to all. We spend our wages before we receive them we run up debt that we can’t afford to pay back and hence run up more debt. Even the law has encouraged this behaviour with the easing of bankruptcy rules and penalties.

So back to your thoughts Ben, is the likelihood of a global recession going to create the shift needed to change behaviours. It does depend on how severe it becomes. Will we give up our foreign holidays because the days of cheap flights are over? Will we give up the independence of driving our cars  because petrol becomes very expensive? Will we turn down the heat in our homes or look for alternative energy sources because fuel increases in cost? Will business develop new environmental practises which are too expensive now?  In these economic conditions this paradigm shift is only likely to occur because we really have no choice. Thus it may be by default that a sustainable economy and lifestyle is adopted but probably only if it becomes more economical than the lifestyle we currently have.