Is the credit crunch good for the environment?

//Is the credit crunch good for the environment?

Is the credit crunch good for the environment?


Gordon Brown has again emphasised that the low carbon economy is at the heart of the Government’s plans for economic recovery saying that 400,000 ‘green collar’ jobs could be created. The Government has four new initiatives – energy efficiency, infrastructure investments such as wind and nuclear power, low carbon vehicles and ‘regulatory certainty’ to draw business to the UK. One part related to energy efficiency, the package of extra cash for the Carbon Emission Reduction Target programme funded by energy companies to provide free loft insulation and cavity wall insulation for pensioners and those on benefits and subsidised improvements for all other households is already partially in place – providing jobs and cutting fuel use and  Brown says the new initiatives  will mean that the green sector grows from the current £107bn to £152bn in twen years. But the fallout from the recent UN climate change conference in Poznan, Poland, also shows that governments  knee jerk reaction to the recession is sometimes very harmful to the environment – with EC leaders lifting caps on carbon emissions from some of Europe’s biggest polluters. The UK Government’s own insistence on ploughing ahead with Heathrow’s Terminal 3 follows echoes this (hence Peter Mandelson’s sliming on the same day Gordon promised us a green future).

So, will the credit crunch be good for the environment? A couple of weeks ago I submitted an ‘answer’ to a question posed in the Times by a Mr Alan Webster from Liverpool who asked Has anyone yet calculated the (negative?) effect of the current economic slowdown on global warming? Well, my short answer was this:

The sharp drop in oil prices means that solar and wind energies look less attractive to investors, more cars are on the road again and a drop in commodity prices means recycling initiatives stall. Conversely consumer spending will reduce, manufacturing output has already dropped, air travel will shrink and it is probable that less energy will be used by both industry and the public in the UK. The conundrum is that these ‘positives’ and ’negatIves’ may be outweighed by other factors – for example new state driven infrastructure projects begin pumping greenhouse gas emissions back into the atmosphere. Whilst Gordon Brown has indicated that environmental projects remain at the heart of his economic ‘rescue’ packages, I think the real answer can be seen from the recent Poznan UN climate change conference – with many EU leaders putting economic concerns above environmental risks.

My earlier blog on the Julies Bicycle website on the effect of the economic crisis on the battle against climate change and Teresa Moore’s interesting comment can be seen at and I’ve re-posted this below.

Posted October 8th 2008

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

On the ETS see:

Image from the Morton Arboretum:,2,8

With the G20 summit in London on the horizon are some pithy comments:

Stop Climate Chaos say “World leaders must seize the opportunity to tackle climate change and the economic downturn together. Only by investing in green jobs and thriving low-carbon economies will a sustainable way of life be secured for generations to come. The G20 owes it to those at most risk and yet least responsible for both the economic crisis and the threat of climate chaos to agree a global green new deal”

Friends of the Earth say “The G20 countries are still the biggest per capita polluters and have done the most to cuase climate change by pumping out greenhouse gases for hundreds of years. We must show real global leadership by developing a genuinely low carbon domestic economy ……  investing in green energy sources , cutting energy demand will slash emissions, reduce our dependency on fossil fuels and create millions of new green jobs”.

Peopleandplanet say  “Young people are concerned about their own future, about conflict and climate change, but are also clear ow univeisties and governments are perpetuating the problem …. lets listen to what they [young people] are telling us and build a green future that puts people first”

and the Archbishop of Canterbury, Rowan Williams, said “we have woken up belatedly to the results of behaving as if scarcity could be indefinately deffered: the ecological crisis makes that painfully clear ….. it has become clear that lifestyles dependent on high levels of fossil fuel consumption reduce the long term opportunities of basic human flouishing for many people because of their environmental c0st – not to mention the various political traps associated with the production and marketing of oil in some parts of the world, with the subsequent risks to peace and regional stability”.

This is now a youthful rebellion. We see the catastrophe ahead” by Joss Garman, The Observer 8th March 2009 p31.

By |2016-11-01T15:06:25+00:00March 7th, 2009|AGF Blog|