Opinion Sur Joven

The global financial crisis started rolling as a snowball in September and has already turned into an avalanche destroying everything in its path: jobs, industries, bonds and shares, and even the neoconservative principles that have ruled the economy for three long decades.

In that sense, it didn’t take long until some sectors started to call a halt to the fight against climate change: they are asking to postpone it to fix the financial situation first and then take care of the planet.

This request is grounded on the notion that, in moments of budget shortage, battling global warming would imply “losing” valuable resources in trying to reduce carbon emissions instead of spending them on economy reactivation.

Now, the question is whether this contradiction between both problematics really exists, and if this war some sectors want to declare could end up postponing the resolution to one of the most significant problems of this century.

Every cloud has a silver lining

One of the first appearances of this contradiction took place at the European Union (EU) Summit in October. There, Poland and Italy –followed by several Eastern Europe countries- threatened to veto EU measures to stop greenhouse gas emissions (mainly carbon dioxide) to reduce Europe’s dependence on the fossil fuels generating said emissions (such as oil).

These countries are worried for a logical reason: the EU aims at a reduction of 20% of carbon dioxide emissions by year 2020. Today Europe’s already saving 20% of energy consumption and producing a similar percentage through renewable sources. This implies high costs for productive reorganization and investments in clean energy sources.

French president Nicolas Sarkozy –current president of the Council of the EU- answered to these claims: “If Europe doesn’t set the example, it will not be heeded, respected, listened to. (…) It would be tragic to abandon this policy on the pretext of the financial crisis.”

That’s the heart of the matter for Juan Carlos Villalonga, political director of Greenpeace Argentina, who interviewed by Opinión Sur Joven confessed his fear of “a domino effect leading everyone to the easiest way”.

"If the industrialized countries keep their environmental struggle expectations low, China and India will too, and that’s very dangerous because it could stop the construction of the second Kyoto Protocol”, he explains.

By the end of 2009, the discussion to create the second phase of the famous Protocol will start in Copenhagen, Denmark; it’ll aim at reaching goals beyond the ones of the first version, set during the last decade. “There are meetings to negotiate that text already, and if they get stuck, there will be a delay and the expectations will be much lower”, he adds. According to the agreement between experts, the emissions of industrialized countries should be reduced by 30% already, and aiming at reaching a 50% to 80% reduction by 2050.

Notwithstanding the claims, Villalonga still believes that, in the middle of the financial turmoil, a new opportunity appears to move on with the environmental care of the planet. “There’s still hope. There is a great opportunity for investments related to climate change, because all countries are analyzing a strong anti-crisis investment movement. We could take this chance to invest in renewable energies and generate a green new deal”, he says.

According to Greenpeace Argentina’s leader, employment generation in eco-sustainable businesses is much higher: “When you compare an investment in wind power, for instance, with another industrial investment, the first one has a stronger impact on job creation. And this is not a hypothesis”.

“The crisis has a clearly negative effect, investments decrease and priority is set on economy instead of climate change. And if eco-sustainable production is more expensive, even worse. But we must take advantage of the situation to make it positive, and thus bring economy back to life through job-generating investments”, he concludes.

Financial environment

There’s a point where finance and environment don’t collide as opposed interests, but they get together and feed each other: these are the environmental markets, where environment-related bonds are traded: carbon credits, greenhouse gas emission trading, renewable energy certificates and all assets providing liquidity to the entrepreneurs who want to implement and eco-friendly production system.

Matías Steinacker, financial advisor at J.P. Morgan’s Environmental Markets (headquartered at Santiago, Chile), explains that his function is to help his clients take good opportunities and prepare for the new challenges of an economy limited by the planet’s health.

“The international crisis is affecting both the demand and supply of carbon credits. The supply of these credits depends on the decision to conduct projects that reduce gas emissions and, currently, investments in these projects are decreasing”, the Chilean specialist tells Opinión Sur Joven.

“In terms of demand, we’re seeing that industries with high energy consumption levels –which consequently produce carbon dioxide emissions- are cutting their production levels by 20% to 30%, which implies an immediate reduction of carbon credit demand”, he adds.

As we can see, the brutal and largely-mediatized stop the economy suffered in September doesn’t only affect the state aid to climate change, but also the materialization of eco-sustainable projects. Does this dark prospect favor the opinion of freezing the fight against climate change?

Steinacker’s answer is categorical: “In the medium and long run, the economic crisis will pass, but the environmental crisis will be present for a long time, so this crisis brings an opportunity for a more sustainable development. Taking advantage of the high investment level that will be necessary to reactivate economy, we could consider an intelligent type of growth, with governments playing a vital role by encouraging investments in clean, sustainable and long-lasting technologies".

Furthermore, Steinacker seems to give an indirect answer to Silvio Berlusconi (Italy’s president and main supporter of stopping efforts to fight climate change in October) by insisting on this: “If we stop fighting for the environment, the costs of doing it in the future will be higher. This wouldn’t be convenient at all”.

The governments of both developed and developing countries are implementing measures here and there to fix their economies or avoid even a deeper crisis. There still isn’t a sole solution for the financial crisis, and we can’t really assure that markets won’t destroy these anti-crisis measures even before they prove being effective.

That’s why this is the right time for civil society to take action immediately and demand governments not to postpone the fight against global warming. To demand that their public investment projects (some of which have astronomically high costs) create a productive revolution in favor of the environment. Because if we don’t do it when the global system is getting back on its feet, when will we? If not now, when?