Michel Euler/AP
French President Nicolas Sarkozy speaks
during a final media conference after an
EU summit in Brussels.

Financial Hurdles May Slow Move Toward a Greener Economy

October 21, 2008 08:53 AM
by Christopher Coats
As a global financial slowdown threatens to derail environmental efforts around the world, some see the green economy as a possible economic savior.

Environment Takes a Back Seat

When European leaders met last week to discuss plans to further efforts to curb emissions, it became clear that some countries had reassessed how important such efforts were in light of a possible global recession.

Led by Italy, a number of Eastern European states argued that implementing the regulations needed to meet a 2007 pledge to reduce emissions to 20 percent below 1990 levels would make it impossible for their economies to grow in an increasingly volatile and competitive global marketplace.

This caution reflects a visible sense of worry emerging across the globe as countries re-examine environmental efforts in light of an international financial slowdown.

In Washington, D.C., members of Congress also expressed concern that environmental efforts like passing laws to reduce greenhouse gases and carbon dioxide emissions will likely take a back seat to stabilizing the ailing economy.

“Clearly it is somewhere down the totem pole given the economic realities we are facing,” Tom Williams, a spokesman for Duke Energy Corp., an electricity producer that has supported federal mandates on greenhouse gases, told the Associated Press.

The largest threat to U.S. efforts appears to be worries surrounding the economic implications of “cap and trade” proposals. Under such efforts, companies that produced greenhouse gases would be given or sold emission credits by the government, which they could sell or exchange on a public market.

The profits from such credits, under many proposals, would be used to fund alternative energy efforts.

However, some worry that emission credits would place further strain on an already fragile economy.

“The current economic crisis only reinforces the public’s wariness about any climate bill that attempts to increase the costs of energy and jeopardizes jobs,” Oklahoma Sen. James Inhofe told the AP.

Reactions: Green measures necessary for growth

While governing bodies on both sides of the Atlantic are stepping back from environmental efforts, some critics point to an emerging green economy as the path toward a stronger, more diverse marketplace.

Both candidates for president have pointed to “green jobs” as an economic engine that drives the country forward, although others caution that progress could leave some behind.

The United Nations Environment Programme points to a recent study that predicts that the global green economy stands to double in size by 2020, amounting to approximately $2.74 trillion, though the economic downturn and a lack of innovation infrastructure will leave many poorer countries behind.

This worry appeared to be at the heart of protests at the European summit, as emerging economies in Eastern Europe complained that they would be unable to compete for manufacturing jobs if they implemented the measures presented by their wealthier neighbors to the west.

They suggested that the EU not only allow veto power to any country that felt it could not implement the efforts, but also move the January deadline set for cutting emissions.

Still, proponents of the measures asserted that any pause could be detrimental not only to their environment but also to their standing in the world.

“We have to find a solution before January,” said President Nicolas Sarkozy of France, the chairman of the summit meeting. “We are not going to hide behind the crisis. Europe must set an example.”

Related Topic: Is there a silver lining?

Finding a silver lining in the global financial recession, atmospheric scientist Paul J. Crutzen suggested that the slowdown would give the planet a breather by reducing the number of companies emitting greenhouse gases.

“It’s a cruel thing to say … but if we are looking at a slowdown in the economy, there will be less fossil fuels burning, so for the climate it could be an advantage,” the Nobel Prize-winning scientist told Reuters in an interview.

However, some entrepreneurs are not displaying Crutzen’s positivity. Inventors and scientists who may offer the next wave of green innovation are finding it more difficult to find venture capital for their projects, as global confidence lags.

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