What Will Be The Impact Of The Economic Crisis On The Environment?
Back in this older post, I wrote the following (emphasis added):
Here's a question: why not use this as an opportunity to begin the salutary (ahem) shift towards a green economy?
Or will the current crisis be the excuse to postpone ad vitam eternam the critical need to stop global warming - thus placing our (short-sighted) economic interests above our very survival not only as a species, but with regards to our civilization?
Incidentally, the following article explores those very same questions:
(...) And thus, "Kyoto has failed" has become the new meme, while economic scare tactics against fighting Global Climate Change have become "common sense" (just three examples here, here and here).And so, now we come to the current global economic crisis ...
In the meantime, governments are pushing for biofuels (this is very much the case in both the U.S.A. and Canada) - regardless of the fact that they will contribute equally in GHG's emissions as fossil fuels.
The growing world-wide food crisis notwidthstanding, that is.
But wait - I fear that I must correct myself here, for it is indeed the food crisis, the price of oil and the current turmoil of global markets which are now used as further justifications to claim that fighting Global Warming will destroy our (now shaky) economies.
How convenient.
Here's a question: why not use this as an opportunity to begin the salutary (ahem) shift towards a green economy?
Or will the current crisis be the excuse to postpone ad vitam eternam the critical need to stop global warming - thus placing our (short-sighted) economic interests above our very survival not only as a species, but with regards to our civilization?
Incidentally, the following article explores those very same questions:
The Crisis and the Environment
by Michael T. Klare
Given the magnitude and scope of the current economic crisis, the world will no doubt experience a significant economic downturn - of what degree and duration, no one can say - profoundly affecting all aspects of U.S. and international society. Of the many areas that will be impacted by the downturn, the environment stands out in particular. It's closely tied to the tempo of resource consumption, and significant efforts to ameliorate environmental decline will prove very expensive and out of reach for already-stretched budgets. The question thus arises: Will the crisis be good or bad for the environment, especially with respect to global warming?
To put this question in perspective, it is necessary to first look at the environmental situation prior to the crisis.
Gathering Crisis
By all accounts, the steady growth in the world economy - much of it driven by phenomenal economic expansion in China, India, and other nations - was producing a corresponding increase in demand for energy of all forms, especially greenhouse-gas emitting fossil fuels. According to the latest pre-crisis projections by the U.S. Department of Energy (DOE), combined energy consumption by all nations of the world was expected to grow by 22% between 2005 and 2015, from 462 to 563 quadrillion British thermal units (BTUs). Most of this increase, almost 90%, was expected to come from fossil fuels - oil, coal, and natural gas.
The result, not very surprisingly, was a dramatic projected increase in the emission of carbon dioxide (CO2), the leading source of climate-changing greenhouse gases. Again using DOE projections, total world emissions of CO2 were expected to increase by a frightening 22% between 2005 and 2015, from 28.1 to 34.3 billion metric tons. This increased rate of greenhouse-gas emissions would precipitate global climate change, resulting in persistent droughts, increased storm activity, and a significant rise in the sea level.
At the same time, however, the rising price of oil - itself caused by the sharp increase in demand - combined with growing awareness of the risks of global warming to create an unprecedented spurt in investment in alternative energy ventures. Many governments, energy firms, and venture capitalists have announced plans to spend vast sums on the development of climate-friendly alternative fuels and improved methods for obtaining energy from wind and solar power. In November 2007, for example, Google announced that it would invest hundreds of millions of dollars in the development of advanced renewable energy sources. These efforts, and others like them, wouldn't reverse the trend toward higher CO2 emissions between 2005 and 2015 but could set the stage for a dramatic turnaround in the years that follow.
How will the current economic crisis affect this picture? As in so many things, there's both good news and bad news.
The Upside
The good news is that economic hard times will cause people to drive less, fly less, and otherwise consume less energy, thus lowering expectations for greenhouse-gas emissions. According to the most recent projections from the International Energy Agency (IEA) in Paris, global oil demand in 2008 will be 240,000 barrels per day less than in its earlier predictions, and 440,000 barrels per day less than in its predictions for 2009. Many experts believe, moreover, that demand will drop even further in the weeks and months ahead as the economic crisis deepens and consumers around the world cut back on their travel and energy use - and the less oil consumed, the less CO2 emitted.
As petroleum consumption declines, the price of oil is also likely to drop - thereby discouraging investment in many costly and environmental hazardous energy projects.
Already, the price of oil has plunged by nearly half over the past three months, from $140 to $70 a barrel, and some experts see prices going even lower. Fifty dollars a barrel "is now within the realm of possibilities," according to oil analyst Stephen Schork. At these prices, it may no longer be profitable to advance some of the more technologically challenging energy projects with a significant environmental risk, such as the development of Canadian tar sands or Rocky Mountain shale oil. These projects might make economic sense when oil is $80 per barrel or more - despite strong objections from environmentalists - but won't attract support from investors when the price of oil slips much below this level.
The current economic crisis is closely linked with housing, and this too has a silver lining. Many dwellings built in the heyday of subprime lending were oversized homes in distant suburbs far removed from public transit, or second homes in Sunbelt vacation sites far from owners' primary residences. These houses consumed a lot of energy and necessitated long commutes. Now, many of these exurban/vacation homes are up for sale and it is doubtful that many of them will be occupied for a long time to come. People are staying where they are, moving closer to public transit, and flying less to second homes. This will also produce a substantial decrease in energy use and CO2 emissions.
The Downside
But there is a downside to all this as well. Most serious is the risk that venture capitalists will refrain from pouring big bucks into innovative energy projects.
(Keep reading ...)
by Michael T. Klare
Given the magnitude and scope of the current economic crisis, the world will no doubt experience a significant economic downturn - of what degree and duration, no one can say - profoundly affecting all aspects of U.S. and international society. Of the many areas that will be impacted by the downturn, the environment stands out in particular. It's closely tied to the tempo of resource consumption, and significant efforts to ameliorate environmental decline will prove very expensive and out of reach for already-stretched budgets. The question thus arises: Will the crisis be good or bad for the environment, especially with respect to global warming?
To put this question in perspective, it is necessary to first look at the environmental situation prior to the crisis.
Gathering Crisis
By all accounts, the steady growth in the world economy - much of it driven by phenomenal economic expansion in China, India, and other nations - was producing a corresponding increase in demand for energy of all forms, especially greenhouse-gas emitting fossil fuels. According to the latest pre-crisis projections by the U.S. Department of Energy (DOE), combined energy consumption by all nations of the world was expected to grow by 22% between 2005 and 2015, from 462 to 563 quadrillion British thermal units (BTUs). Most of this increase, almost 90%, was expected to come from fossil fuels - oil, coal, and natural gas.
The result, not very surprisingly, was a dramatic projected increase in the emission of carbon dioxide (CO2), the leading source of climate-changing greenhouse gases. Again using DOE projections, total world emissions of CO2 were expected to increase by a frightening 22% between 2005 and 2015, from 28.1 to 34.3 billion metric tons. This increased rate of greenhouse-gas emissions would precipitate global climate change, resulting in persistent droughts, increased storm activity, and a significant rise in the sea level.
At the same time, however, the rising price of oil - itself caused by the sharp increase in demand - combined with growing awareness of the risks of global warming to create an unprecedented spurt in investment in alternative energy ventures. Many governments, energy firms, and venture capitalists have announced plans to spend vast sums on the development of climate-friendly alternative fuels and improved methods for obtaining energy from wind and solar power. In November 2007, for example, Google announced that it would invest hundreds of millions of dollars in the development of advanced renewable energy sources. These efforts, and others like them, wouldn't reverse the trend toward higher CO2 emissions between 2005 and 2015 but could set the stage for a dramatic turnaround in the years that follow.
How will the current economic crisis affect this picture? As in so many things, there's both good news and bad news.
The Upside
The good news is that economic hard times will cause people to drive less, fly less, and otherwise consume less energy, thus lowering expectations for greenhouse-gas emissions. According to the most recent projections from the International Energy Agency (IEA) in Paris, global oil demand in 2008 will be 240,000 barrels per day less than in its earlier predictions, and 440,000 barrels per day less than in its predictions for 2009. Many experts believe, moreover, that demand will drop even further in the weeks and months ahead as the economic crisis deepens and consumers around the world cut back on their travel and energy use - and the less oil consumed, the less CO2 emitted.
As petroleum consumption declines, the price of oil is also likely to drop - thereby discouraging investment in many costly and environmental hazardous energy projects.
Already, the price of oil has plunged by nearly half over the past three months, from $140 to $70 a barrel, and some experts see prices going even lower. Fifty dollars a barrel "is now within the realm of possibilities," according to oil analyst Stephen Schork. At these prices, it may no longer be profitable to advance some of the more technologically challenging energy projects with a significant environmental risk, such as the development of Canadian tar sands or Rocky Mountain shale oil. These projects might make economic sense when oil is $80 per barrel or more - despite strong objections from environmentalists - but won't attract support from investors when the price of oil slips much below this level.
The current economic crisis is closely linked with housing, and this too has a silver lining. Many dwellings built in the heyday of subprime lending were oversized homes in distant suburbs far removed from public transit, or second homes in Sunbelt vacation sites far from owners' primary residences. These houses consumed a lot of energy and necessitated long commutes. Now, many of these exurban/vacation homes are up for sale and it is doubtful that many of them will be occupied for a long time to come. People are staying where they are, moving closer to public transit, and flying less to second homes. This will also produce a substantial decrease in energy use and CO2 emissions.
The Downside
But there is a downside to all this as well. Most serious is the risk that venture capitalists will refrain from pouring big bucks into innovative energy projects.
(Keep reading ...)
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