The Environment

You hear it everywhere: “Take advantage of the crisis”. But in a time of financial disaster and climate change panic, green stimulus programs really could be a way out.

This year it was in Toronto. At the G20 summit of the most important industrial and developing nations, violent demonstrators laid waste to the city’s downtown area in protest of the meeting. Cars were burned and windows broken. The Canadian police arrested 19,000 people in an attempt to keep the peace. Their efforts cost the country 930 million Canadian dollars, roughly 729 million euro.

No legitimacy

If you see the recurring images of the violent outbreaks at the summit as an indicator of anti-globalization sentiment, then the movement is in a real crisis of legitimacy. Hermann Sautter, professor for theoretical and development economics in Göttingen, saw this crisis coming ten years ago. The moral legitimacy of globalization will face increasingly fierce resistance, Sautter predicted in one of his lectures. The reason? “A global release of market forces will lead to inhumane, unjust and unaccountable results.”

There is poverty and hunger all around the world. It results in an alarming amount of suffering and death. Every three seconds a child dies from the effects of poverty and hunger. At the same time, the destructive exploitation of earth’s finite resources continues. The catastrophe in the Gulf of Mexico, where thousands of barrels of oil have been flowing freely into the ocean for weeks now, is just one example. The message is clear: We can't go on like this. A study by Julia Blasch, Dr. Renate Schubert and Dr. Birgit Soete came to the same conclusion. “There exists an acute necessity for a transformation of our fossil fuel-based economic system. To avoid environmental changes and their dramatic consequences for human civilization, we must pursue economic and ecological sustainability at the same time.”

Make green money

Indeed, the necessity to implement greener financial and economic stimulus packages is obvious. It even appears to have caught the attention of politics and business. The conclusion for Pavan Sukhdev, an economist at Deutsche Bank, is that natural resources and climate change make up the core problem of the future. Sukhdev is working at the moment for the United Nations Environmental Programme (UNEP) where he leads an initiative to promote green economic policy. He doesn't argue by pointing the moral finger. He sees an opportunity in problems like the financial crisis and global warming.

In response to the financial crisis and climate change doom, nations are now getting more involved than ever in national and international economic processes. So why not invest the massive amounts of public money from economic stimulus packages into programs with ecological benefits? Sukhdev’s calculations – which would fit handily into the government’s current appraisals – show that such measures could create more jobs, improve climate protection and diminish poverty all at the same time. By 2020 the government is estimating worldwide revenues from environmental technologies to double to 3.1 billion euro. It follows that the most important pillars of a sustainable economy are the development of environmentally-friendly automobiles and the climate-friendly modernization of our buildings.

China as a role model?

Admittedly, an analysis by HSBC bank shows that the share of stimulus money going towards ecologically sustainable measures in many EU countries is less than ten percent - among them Spain, Italy and Great Britain. The USA also spends just ten percent while Germany checks in at 13 percent. But both of them fall embarrassingly short of South Korea, for example, who is investing a whopping 81 percent of its stimulus package in environmentally-friendly technologies. tain. The USA also spend eat r money going towards green measures in many EU countries is less than ten percent.

Even China, which is still considered a blatant environmental bad guy, now invests an impressive 38 percent in green technologies. That comes to roughly 230 billion euro being spent on environmental projects. Among the concepts being promoted are an increase in energy efficiency and the construction of plants for generating renewable energy. The Chinese wind power market is booming; the performance of newly installed windmills has doubled within just one year.

Green stimulus packages can work to sustainably revive the economy as well as slow down environmental destruction. A study by run by Pavan Sukhdev at the UNEP called Green Breakthroughs shows this. It can work if world economies like the USA and other European nations invest more in the shift to ecologically sound practices. It is a bad sign, however, that the first comprehensive body of law on climate change failed to get approval from US president Barrack Obama.