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Financial crisis threatens climate-change momentum

Experts fear the credit crunch will discourage governments worldwide from turning to taxpayers for assistance in climate-change efforts.

By Mark Rice-OxleyCorrespondent of The Christian Science Monitor / November 13, 2008

A factory in Kawasaki, Japan. Japan’s CO2 emissions reached record levels in 2007.

Reuters/Kim Kyung-Hoon



As financial mayhem and recession increasingly demand the attention and resources of governments around the world, environmentalists are starting to fret: What about climate change?

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Their concern is not just that the trillions devoted to rescuing the global financial system mean less cash for the climate-change agenda; they are worried a prolonged recession will deflect consumers from green habits and drain corporate and government coffers of funding for research and development into green technology.

Yvo de Boer, who heads the UN climate change secretariat, warned last week that it was “undeniable that the financial crisis will have an impact on the climate-change negotiations,” which are due to resume in Poznan, Poland, next month.

He noted that of the 190 nations seeking to conclude a new UN treaty in Copenhagen next year, few would find it easy to turn to taxpayers for funding.

“If we go to citizens under the current circumstances ... and say ‘I’m increasing your tax burden ... to pay for climate policy,’ that might not go down very well,” Mr. de Boer said at a recent conference in China.

Tom Burke, founding director of the sustainable-development group E3G, adds that the financial crisis has generated a “politics of distraction.” “People are focused on other things and [climate change] has slipped down the attention span of politicians and the media,” he says.

Professor Burke believes some businesses and governments have opportunistically used the crisis to wriggle off the climate-change hook. He notes how governments in Eastern Europe have begun to challenge EU emission-reduction targets, fearing this will hit industry at the worst time.

“It makes the prospect for getting agreement to a second phrase of the Kyoto protocol in Copenhagen next year a steeper hill to climb,” he says.

Yet optimists maintain that the situation presents an opportunity, arguing that if the world can take rapid, expensive action to save its banks, it can do the same to save its climate.

“One thing we have realized is that the authorities can take action if they want,” says Stefan Singer, head of the European Climate and Energy Unit at WWF. “We’ve been saying it will take a couple of hundred billion dollars to deal with this in the short term.

“We knew it was a massive amount of money, but in the financial crisis we have seen it is possible to mobilize lots of money as soon as governments and heads of state take things seriously,” he adds.

When heads of state meet in Washington this weekend to discuss how to resuscitate international financial architecture in the wake of the economic crisis, climate change will figure fleetingly, if at all.

Meanwhile, at government level, responses to the crisis have largely involved measures like cutting interest rates and fiscal-stimulus packages designed to get the “old economy” moving again.

Environmentalists are concerned that a big opportunity is going begging, that financial reforms should take into account the wider risk of climate change to the world. As one UN official put it, all the talk has been about Wall Street and Main Street, but what about places with no streets?