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Is a bad economy good for the environment?

A recession may be a cruel remedy for environmental degradation. But some experts say the earth welcomes the breathing room.

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Environmentalists realize that a recession is a cruel remedy for climate change. “No one would argue that a recession is the way to solve our climate problems,” says Manish Bapna, executive vice president and managing director of the World Resources Institute. But, he allows, “it puts a little time back on the carbon clock.”

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“It gives us a moment of breathing room,” says Rick Duke, director of the Center for Market Innovation at the Natural Resources Defense Council. “But it’s not something you can count on.”

“It’s not a blockbuster impact,” adds Frank O’Donnell, president of Clean Air Watch. “You would have to have a screaming downturn and no manufacturing at all to change that [worldwide greenhouse-gas emissions] in a huge, measurable way.”

Environmentalists are more encouraged about how efforts to stimulate economies, especially in China and the US, may have “green” effects. Japan and South Korea also have announced stimulus plans that contain “green” aspects.

China has pledged to spend roughly 4 trillion yuan (about $586 billion) to prime its economy. There are indications that some of its most energy-intensive heavy industries, such as steel and cement, may not be rebuilt in favor of less-polluting light industries that are more efficient job creators. And given its huge air pollution problems, China is committed to steering its flourishing auto industry toward nonpolluting electric vehicles.

“If China takes advantage of the crisis to consolidate heavy industry, improve its energy efficiency, and free up investment capital for lighter manufacturing and services, then it will emerge from the crisis with a growth model that pollutes less and employs more,” Houser says.

The US stimulus package includes a number of “green” provisions. “Much of the stimulus funding is going toward clean energy, and that is fantastic,” Mr. Duke says.

Among the most effective in both lowering energy demand and creating jobs, economists say, is funding to cut energy usage, including insulating homes and public buildings. “Such projects are highly labor-intensive, can be done quickly, and will save energy,” says Robert Stavins, director of the Environmental Economics Program at Harvard University. “And, importantly, they will reduce the long-term cost of meeting climate objectives.”