WITH the global economic recession, a broken financial system, job losses, fall in assets, drop in wealth, persistent poverty and growing environmental problems it is time to change our model of economic growth.
The global recession is an economic tsunami that sweeping across the planet destroying companies, banks, jobs and lives in its path. To recover from the global slump an economic stimulus is deemed necessary to kick-start production and consumption. The rebuilding of the global economy provides a unique opportunity to create a low-carbon economy that will provide jobs, stabilise the climate and ensure both financial and ecological sustainability.
The capitalist model of development has been to strive for ever more growth but it has failed to deliver greater happiness, freedom from poverty and sustainable use of the planet’s finite natural resources. Instead it has delivered prosperity for the few based on ecological destruction and social injustice. A report of the UK Sustainable Development Commission entitled Prosperity without Growth? claims that it is delusional if we think that the current capitalist economic model can stabilise the climate and protect resource scarcity. Improvements in energy intensity (carbon) have been offset by increases in the scale of economic activity. Global carbon emissions from energy use have increased by 40 per cent since 1990. There is no credible socially just, ecologically sustainable scenario for a growing incomes of 9 billion people.
The economic recovery will demand investment. At the G20 London Summit on 2 April 2009 leaders of the world’s largest economies agreed a global plan for economic recovery and reform. The twenty-nine point communiqué, included US$1.1 trillion for global economic recovery, but was weak on trade issues and a commitment to spend a substantial share of the economic stimulus on low-carbon recovery projects.
Many environmental groups are calling for a need for a global green deal to invest in a green economy. Targeting investment towards energy security, low-carbon infrastructures and ecological protection is vital if we are to achieve a green recovery. It has been suggested that at least two per cent of world GDP should be targeted to green investment and job-generating projects.
A report on pathways to a low carbon economy by McKinsey and Co claims that moving to a “green” global economy is affordable and can protect the planet from the worst effects of climate change by being kept global temperatures below the critical 2°C. The study lists more than 200 opportunities, spread across ten sectors and twenty-one geographical regions, which could cut global greenhouse gas emissions by about 40 per cent below 1990 levels by 2030. That is if all the technology options were put into practice.
For a bargain price of less than half a per cent of global GDP greenhouse gas emissions could be reduced. This would be achieved by investment in wind, solar and other sustainable renewable energy which could by 2030 provide almost a third of all global power needs. Energy efficiency could reduce greenhouse gas emissions by more than a quarter and deforestation in developing countries could be almost fully halted.
This need for a green recovery is slowly trickling thorough to our political leaders. In an interview with The Independent newspaper, the UK Prime Minister, Gordon Brown, in a reference to green initiatives in the budget, which will be on Wednesday 22 April, Brown said: “This is a major part of our plan for recovery in the budget. We will set our proposals for greener economy.” This will enable Britain to become a market leader across the world for electric and hybrid cars. We wait to hear the measures that the UK government will take.
It is clear we cannot go back to our past ways of operating our economic system. The economic recovery has to deliver a different quality of economic growth that can deliver immediate and long-term benefits, reduce the effects of climate change, reduce energy insecurity and the depletion of natural resources.
A Green recovery is the only option.
© Gary Haq 2009