Financial and economic turmoil dominated the international agenda in 2008. Will the slowdown help reduce emissions or push global warming off center stage?
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In 2008, the worst financial crisis since the 1929 Wall Street Crash caused the most serious global economic recession since the Great Depression. But not only stocks plummeted, efforts to tackle climate change, poverty, and hunger also hit rock bottom.
Governments bailing out banks found little time or money for long-term issues. World trade talks collapsed and the bad blood spilled over into the UN climate change conference: it ended with developing nations attacking rich countries after they donated a meager 80 million dollars to help the world’s poor adapt to natural disasters caused by climate change.
The EU did agree a landmark deal to reduce greenhouse gas emissions, but only after several countries insisted economic recession meant their polluting industries should be partially exempted. Even Barack Obama said economics could limit his plans to cut U.S. emissions. While it is trying to reduce its emissions, China is more concerned that slow economic growth will leave millions of urban migrants jobless.
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Meanwhile, the World Food Programme had to “appeal repeatedly” to donor governments to help feed the nearly one billion people going hungry every day as higher food and fuel prices in early 2008 cost developing countries an additional 680 billion dollars.
While the economic downturn sent oil and coal prices plummeting in the second half of the year, the credit crunch meant there was less money to invest in renewable energy: a double blow to the prospects for a shift to green energy. Solar and wind power companies’ shares tanked as orders dried up.
There is another way to look at the upheaval: as a breathing space. In 2008, global emissions will grow less because of reduced economic activity. Likewise commodity price growth has slowed somewhat, which should ease pressure on the hungry.
Some sectors are weathering the storm. Microfinance institutions continue to grow. Their low-risk banking model suffers very few defaults: a useful lesson for bankers elsewhere.
Another lesson, says Nicholas Stern, is that the recession offers an opportunity to reinvigorate and remake the global economy through “low carbon growth". That means public spending on public transport, energy efficiency and green technologies. UN Secretary General Ban-Ki-Moon wants a “Green New Deal”. Barack Obama says he will create millions of green jobs.
The trillion-dollar question for 2009 and beyond is whether these good intentions will endure as governments, companies, and individuals focus on the bottom line.
editor: James Tulloch
publishing date: December 19, 2008
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