While The World Fights Recession, Let Us Not Forget Climate Change


Author : Kemal Dervis

Date : February 11, 2009

The link between human activity and climate change is established. There is uncertainty as to how exactly the physical processes that mediate between greenhouse gases emissions and changes to our planet's climate will unfold, but these processes are not easy to reverse, and may even be irreversible. Catastrophic effects are possible in the long-run and the more we wait the greater the risks.

We must step up our efforts to mitigate climate change now as a form of insurance against these growing risks. At the same time, we now know with certainty that climate change will have a larger and more immediate negative impact on many of the world's poor. Our concern for development and poverty reduction, as captured in the Millennium Development Goals, dictates that we mitigate climate change urgently to reduce the threats to the development prospects of the most vulnerable, as well as take action to help those already affected to adapt.

 

To mitigate climate change we must make deep cuts in greenhouse gases emissions over the next two or three decades, starting now. This requires fundamental transformations in our carbon-based economies. This task may appear especially challenging now as the world faces the deepest economic crisis in several generations. However, I think that the current challenging economic situation is not a reason to delay action on climate. Instead, it presents a unique opportunity to reinvigorate our response.

 

To counteract the recession and revive growth, large fiscal expansions are either being considered or implemented. Devoting part of the expanded public spending to green investment and jobs pays off in the short-run -compensating the drop in private consumption and investment - but also helps with the transition towards low carbon economies. This idea is shared by many and is already being incorporated in some economic stimulus plans. For example, the plan currently under consideration in the US allocates resources to revamping the energy grid, making public buildings and housing more energy efficient, increasing renewable energy production, and enhancing mass transit and rail to reduce gas consumption. The proposal of the European Commission for a European stimulus has similar provisions. China's stimulus package also allocates resources to improve energy efficiency and to modernize the energy grid.

 

So even though these initiatives could be more ambitious and better coordinated internationally, the opportunity of using the response to the economic crisis to jumpstart our efforts to reduce emissions is, in fact, being seized.

 

But this alone will not be enough. Policymakers need to ensure at the Conference of Parties 15 in Copenhagen that these public investments made at a difficult time do not go to waste by ensuring a long term commitment to climate change mitigation.

 

A counter-cyclical fiscal impulse cannot ensure the long-term effectiveness and profitability of these climate change mitigating investments. Our economies will only sustain a long-term commitment to drastically reduce greenhouse gases emissions if we put in place policies that ensure strong and predictable incentives and financing to mitigate climate change. To achieve this, prices in our economies have to send the right signals to households and firms in guiding their consumption and investment decisions towards reducing greenhouse gases emissions. This means prices need to start reflecting the full social costs of emitting greenhouse gases as well as the benefits of opting for carbon-free technology.

 

At the Conference of Parties 15 in Copenhagen, the world is hoping for a global deal that is comprehensive, ambitious, equitable and sustainable in terms of technical implementation and the political processes in sovereign nations. While some arrangements for carbon trade are already in place, including in the context of the Kyoto Protocol and at the European Union (EU) level, further efforts to price carbon in a way that is effective and fair (reflecting the principle of common but differentiated responsibilities as agreed in the UNFCCC) are crucial.

 

There are several alternatives to pricing carbon. Cap-and-trade mechanisms, carbon taxes, or a combination thereof, can work. Options that price carbon and that at the same time smooth volatility might be particularly attractive, especially in light of the extreme fossil fuel price volatility over the last few months. Under this extreme volatility, investment priorities and behavioral changes towards less greenhouse gases emitting activities may be reversed - or not started at all. A variable tax on the carbon content of fossil fuels - high when prices are low and automatically lower when prices increase - would be an instrument that would both price carbon and reduce the volatility in the user cost of fossil fuels. In the long-run, a more stable user cost has advantages for both consumers and producers of fossil fuels. Excessive volatility leads to difficulties in planning investments and inefficiencies in the use of fossil fuel resources.

 

Any arrangement for pricing carbon has to be considered along with the need to ensure that developing countries can meet their energy needs without endangering their economic growth and poverty reduction efforts. Developing countries need to be supported by sufficient resources given their massive needs for scaling up infrastructure and access to energy. A donor-funded program to finance the additional costs of opting for the cleanest technologies available would ensure that as these developmental needs are met in a way that is consistent with climate change mitigation efforts. The program could be financed in part by potential revenues generated in rich countries after the implementation of carbon-pricing mechanisms: the auctioning of emissions permits in cap-and-trade systems and/or carbon taxation.

 

Policymakers are delivering as they fight the economic crisis while keeping up their commitment to addressing climate change. The world is hoping for this commitment to be kept up in Copenhagen. Many issues will be on the agenda, including efficiency standards and direct subsidies for new technologies. Imaginative new funding mechanisms for both mitigation and adaptation in developing countries will also have to be an integral part of a common strategy. But pricing carbon in an effective, fair, and predictable way - through a combination of cap-and-trade mechanisms and some form of carbon taxation - will have to be on the top of the agenda.

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6 comments

Che Thuy Nhu

Date : November 12, 2009 04:30

To all participants in the Forum
My daily observation show that the using of energy create so much C02 .
We need review all energy around us and think how to use it better ? Use more solar energy for dry clothes, foods, rice ... use win energy for light .
CO 2 in Factories and Industrial zone belong to government management .
We will control the energy in family : motobycycle, kitchen, car, and traditional habits .
In Vietnam 1 and 15 ( lunar caledar ) ,every month poeple pray and burn so much paper for died people
paper -money, paper clothes , paper house, paper car, paper bycycle .
We suggest the government control should give the guide to printing centers to choose the lay -out with big money value so people will burn less paper .
How about traditional habits in your's country ?
Let share
Thank you .

ivo

Date : September 7, 2009 15:03

Hi,

I would like to introduce you one vision about how to tackle Climate Change consequences, as part of a bigger mechanism, and to hear your opinion regarding its feasibility.

Basics:
1. We experience very heavy economic crisis affecting many types of business and millions of people.
2. Many scientists conclude that the economic consequences from the worsening environmental situation resulting from climate change will be even heavier. For instance: the financial loses from just one hurricane are measured in hundreds of billions of dollars.
3. Energy issue and its multiple aspects "weight" more and more: growing needs, prices, abundance, political independence, degree of pollution, etc.

Unprecedented situation requires unprecedented steps. In this relation, I would like to ask you kindly to consider the possibilities described in Desert Ice Project - http://www.deserticeproject.com

There you will find a description of the project aimed to fight global warming (and many other related global problems like desertification / drought, food and water shortage, poverty, unemployment, illiteracy, illegal immigration, terror, violence and conflicts, etc.) by global, complex measures - global initiative / network of local focused solutions to specific regions.
If the situation is so bad and even going worse, we must not exclude any alternative.

The emphasis is on the belief that basically we can react to this knot of problems in two key ways:
1. By intensive greening (more trees and leafs - more absorbed CO2, preserved moisture/Water, more stable soil, more jobs, more own produced food by the locals, more income and profits, more stable economies and more well living people, improved security, etc.). This step alone won't help, because industrial pollution will go on.
2. By sophisticated filtering and energy efficient systems radically reducing heat-trapping gases that flow in the atmosphere – all shaped in one international system of standards, which does not allow one to take unfair advantage compared to the others. Only limiting our greenhouse emissions (CCS techniques alone) won't help, because desertification, drought, water/food shortage and following social problems will continue. So, there must be applied both methods.

This is a large economic initiative that will mobilize many sectors of business - engineering, construction, banking, security, education, agriculture, science, etc. DIP includes large infrastructure projects, that will attract large contractors, and long chain of subcontractors; taking credits; reconsidering ideas that were underestimated so far. For instance: directing resources to "green" production, let say solar panels will open a lots of new jobs in this sector, and this will lower the prices, which will make these panels more accessible by more people. And then the government may oblige business and households for their massive usage - for every car / building roof, for every cell phone and laptop, etc.

Unlike the geo-engineering projects this operation is the most natural one. It only reverses the "negative geo-engineering" that we already did to some places in our planet - deforestation, pollution, too much land used for grazing, etc. Many of its stages are applied already in different parts of the world. They just need to be connected in one system.

Many requirements set by environmentalists seem to be too expensive from the economists' point of view. And the opposite - what industry and business want is often unacceptable by the green. This project tries to find the crossing point between, and it should be assessed by both sides.

We are almost 7 billion (mankind will pass this threshold at 2012), and except the 2 billion people that struggle every day for basics like water and food, the most of the rest want to live the movie version of the American way of life. Not to mention that we need 2 more planets like Earth to feed our consumer needs (greed?).

Every problem is an opportunity in disguise. This is a chance for us, not just for solving the current triple E3 (Environment-Energy-Economy) crisis, but to put international relations / co-operation into a new level.

I hope that this might be interesting for you from your perspective, and that the proposed measures could initiate a serious discussion.

Thank you for your time.
Looking forwards to hearing from you.

Sincerely,
Ivaylo Avramov
Bulgaria

P.S. Latest (seemingly unrelated) news about the Wilkins ice shelf breaking off from the Antarctic Peninsula, the concentration of economic interests (military presence) around both polar areas, and the insecurity of Food/Energy/other resources' prices, reminds us that we are running out of time.

Che Thuy Nhu

Date : June 11, 2009 11:22

To all participants .
This year Hanoi is very hot , in June weather up to 37 oC and forecast to 45 oC .Never in my life the weather is ho tlike this , over body temperature .
In some places electricity is cut off .
Poor can't pay for using air -coordinator .
Children ill because of hot weather
Old persons complain about hot .
We don't know : what to to ? We put the green tree any where, where we can .This is good solution .
Thank you

J.Kelvyn Richards

Date : April 10, 2009 16:03

Financial crash, population crises, climate change. What sort of future?

Scenarios of disaster.

2009: a global financial crash.

* Banks and investment funds had gambled on 'bad investments', generating 'bad loans' or toxic assets - loans that would never be repaid.
*The loss of 33% of GDP, reduced value of global companies such as Toyota, General Motors, Honda, Ford, Panorama, Sony, General Electric.
*The bankruptcy of major banks and investment funds e.g. Lehman Brothers, American Insurance Group, Fannie Mae, Northern Rock, Halifax, Nationwide, Fortis, Royal Bank of Scotland. Bear Stearns.
*The bankruptcy of countries who borrowed too much on easy dollar credit e.g. Iceland, Ireland, Austria, Spain, Italy, Hungary, Poland, Romania, Bulgaria, Serbia, the UK, Ukraine, Russia.
*Governments, local and national, have lost their investments in derivatives and swaps.
* Governments, local and national, have no access to credit, and are unable to generate the cash to run any services – social, medical, transport.
*Millions of workers laid off and unemployment levels rising across the
world.
* The G8, the G20, the World Bank, the Central Banks, the IMF, all bailing out the world financial system so as to re-establish 'liquidity' to the tune of $15 trillion:
*the nationalizing of the debts/losses, but privatizing the profits.
* How long will the 'crash' last? 2010? 2020? 2030?
*Economists are predicting that we are witnessing system changes which may take ten to twenty years to work through. Nobody seems to know or are unwilling to say.

2009: One billion people starving out of 5.5 billion trying to survive on $10 a day.

* The world's population is 6.8 billion, of which 5.5 billion are trying to survive on less than $10 a day.
*The World Food Programme announced in Jan 2009 that over one billion people were starving.
*The World Health Organisation declares that up to 11 million children die in a year.
*Millions of adults and children in the developing world die of starvation, malnutrition, lack of water, lack of sanitation, disease.
* 20% of the world population will struggle to survive.
* This struggle will be made worse by the continuing high food prices, in the face of the expansion of industrial farming, in particular biofuels.
*During the crisis any cash that may have gone for 'aid and development', and the alleviation of the poor, has gone to the relief of the wealthy!

2009: Climate Change

*The publication of reports on Climate Change by various agencies revealed for the first time that climate warming is accelerating and is likely to do so for the foreseeable future, irrespective of what human communities do to control emission of pollutants!
* We have to accept that it is happening……for whatever reason!
*Ice in the Arctic Sea forms only in the winter, and Antarctica ice shelfs disappear. Already, the Wilkins ice shelf has broken away.
* Glaciers and snow fields in the mountains of the world are disappearing.
* Global sea levels are rising.
* The subtropical zones moving north and south, converting grasslands into deserts and making cattle rearing in central Africa and South America more difficult.
* Plants and animals, birds and insects moving north and south in greater numbers to find suitable environments, and diseases such as malaria become common place all over the world.
* Extreme weather events are more dramatic: the droughts across south China, Sept.2008; the forest fires in the southern Meditteranean 2008; and in New South Wales, and South Australia, Jan-Feb 2009; the cyclones in Queensland; the heavy rains and floods in the summer, in the UK, and in the winter in France and Spain; extensive snow storms across Canada and the US, Jan/Feb/March 2009.


2030: changes in the economic balance
* the 'developed world' is in recession, plagued by inflation.
* the countries who 'printed money' have currencies that are almost worthless.
* USA, UK, Europe, Japan: run nationalized banks, operating according to regulated objectives.
* Cash-rich countries, such as China, Saudi Arabia, Dubai, Syria, Jordan, Kuwait, the Emirates, Venezuela, Nigeria, Bolivia, have bought up major corporations in Europe and the USA.
* the economic balance has changed, and the so-called 'developed' world is dependent upon these 'cash economies'.
*China with its communist capitalism is the richest country in the world in opposition to India and the USA.
* China controls all the principal sources of minerals across the world.
* China, the principal communist government, controls the capitalist world! Victory for communism!

2030: Population

*the world's population is 7.5 billion.
* the climate changes have impacted on agriculture and led to starvation and death of up to 2 billion people.
* malnutrition, and disease causes death of up to 50 million children.
* more rigorous birth control measures in China and India; more programmes of birth control in Africa and South America.
* more and more people living in cities….living in the slums, directly suffering from flooding, lack of sanitation, and water borne diseases, including the plague.
* USA, Japan, Europe, Russia have 60% elderly: and a decreasing working population.
* Young working populations are in Africa, and Asia, global migration.
* faced by lack of access to funds, many governments, of 'failed states' corruptly direct these monies to politicians and civil servants.
*the people dependent upon aid, fail: their businesses collapse; education/health projects stop.

2030: climate change

* up to 10C increase in global temperatures.
* the global atmosphere has more than 450 particles per million and there is increasing heat retention.
* rising sea levels have led to flooding, and extension of marshes and deltas; * migration of people from coastal areas across the globe;
* stagnation of rivers, and inland flooding leading to failure of sewage flows.
* most prosperous countries have developed water management systems, along with flood control barrages.
* the increasing temperatures have seen the spread of diseases such as bird flu, ebola, cholera, the plague, lyme disease, TB, yellow fever, sleeping sickness to most of the world, along with HIV and malaria.
* an increase in violent storms, leading to extensive damage to buildings, farms, forests.

see www.kelvynrichard.com: Social Ecology-a new morality


Do you want to offer other scenarios?

????? ?????

Date : March 3, 2009 17:18

excellent ,Thanks for the post

Sophia Sim

Date : February 26, 2009 08:37

First of all, I'd like to extend my sincere appreciation to Mr. Kemal Dervis, for his thoughtful and prompt analysis of the current status regarding the Climate Change. Indeed, the world is finally gearing up toward the full recognition of the dire situation and its solution under the favorable atmosphere generating from the leadership of both the world parliament, the UN and the super power congress, the US. Taking due account of the COP 15 in Copenhagen, I firmly believe that the political momentum will surely be gathered once again that would more or less surpass the extent of Kyoto Protocol.
The major challenge and goal for all of us at stake here will rest on drawing the full participation as well as cooperation from the main culprits of the gas emissions around the world, some of them being the world's super powerhouses. This time, no budging or bungling should be allowed as an excuse for those concerned, as the world seems to be nearing the brink of the final bottom line day by day. The somber acknowledgement that no sustainable growth can be achieved at the cost of natural destruction must be widespread among the world leaders to alert their people to act with boldness and determination.
However, in regard to the pricing of the carbon, there's still a lingering doubt as to how much willing the metropole countries would be toward giving aids and hands to the most vulnerable victims of the environmental crisis. The ironic problem with the climate change is that its victims are expected to be not the protagonist but the bystanders who don't have any faults at all. Whereas the imminent danger posed upon those innocent sufferers are mounting day in day out, the continuing reluctance of the guilty industrialized nations will likely persist in years to come, especially in terms of monetary issues. As the core member of young generation who will have to bear the brunt of the consequences of this major crisis, I cannot but hopelessly pray that the day may come when those callous international leaders will finally wake up to the urgent calling across the planet.

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