Global Trends by Martin Khor

Monday 15 December 2008 

Spend the bailout trillions on climate action

The two crises of our times – economic recession and global warming – should be tackled together, said world leaders last week.  The trillions of dollars earmarked for economic recovery can be spent to fight climate change.


The economic crisis should not stop governments from serous actions to combat climate change, but should instead be an opportunity to fund climate-related activities.

This was a clear message that came out of the last days of the United Nations’ climate talks at Poznan in Poland.

The two major crises of our times – the economic recession and global warming – were addressed by the UN’s Secretary-General and some world leaders at the opening ceremony of the Ministerial segment of the two-week talks.

If the United States and Europe can come up with so many trillions of dollars to save their financial institutions within a few months, surely there is money to tackle the climate crisis, which is a far bigger problem involving the world’s survival.

This point was most emphatically made by Guyana’s President Bharrat Jagdeo who warned that there was an emerging mood that countries cannot act on climate when there is an economic crisis.

“If Europe sends a signal that it can make commitments on climate only in prosperous times, what are developing countries including India and China going to say?” he asked. “Some balk at the financial resources required, but if there is political will this money can be found, like the US$7 trillion raised for tackling the financial crisis.

“We hear the banks and financial institutions need to be bailed out as they are too big to fail. Climate change is an even bigger problem, in which we cannot fail.

The UN Secretary General Mr. Ban Ki-Moon said the world faces two crises, the financial and climate crises. He proposed that a big part of the fiscal stimulus that countries are planning to counter the recession should be spent on investing in a green future, that fights climate change and creates jobs.

He said that leadership is needed, and mentioned Europe, the US (where the incoming administration is putting energy and climate at the centre of US policy), China (where one fourth of its fiscal stimulus package is to scale up energy conservation and environmental protection), and India (with its climate plan and its development of solar and wind energy).

Ban said the coming year is the year of climate change. While the economic crisis is serious, the stakes in climate are higher, and climate change must be at the top of our national agendas. “There can be no backsliding,” he said, calling on countries to break free from entrenched positions, from who is to blame and who will move first.

Tuvalu’s Prime Minister, Mr. Apisai Ielemia, whose Pacific island state is facing extinction from rising sea levels, attacked the lack of progress in the fund under the Kyoto Protocol meant to help countries adapt to climate change. “We need the funds now as climate change is already affecting us,” he said. “But some key developed countries are making the adaptation fund inaccessible to developing countries…This is totally unacceptable.”

While the Poznan talks were going on, bad news came from a summit of European leaders in Brussels which decided to lower the targets set for their industries to comply with regulations to limit their Greenhouse Gas emissions.

The companies are asked to cap their emissions at specified levels and those exceeding these have to pay for permits under the original scheme.  The Brussels meeting last Friday agreed to exempt many of the most polluting industries from payment, after complaints from auto and other companies affected by the recession.

Major groups such as Friends of the Earth, Greenpeace and Oxfam immediately attacked the decision as a betrayal of what had previously been European leadership on climate action. 

Although the European Union is to keep its target of reducing emissions by 20% by 2020 (compared top the 1990 level), the groups estimated the Summit decision will allow companies to pay others outside the EU to undertake up to two thirds of the total reduction for them. There will thus be little domestic action to curb emissions.

The high rhetoric in Poznan was thus being contradicted by the political decisions in Brussels.

The Poznan meeting was given a little boost by the presence of some American figures linked  to President-elect Barrack Obama, like Senator John Kerry who promised the new administration would soon take climate action at home and globally.

The proof of the pudding is however in the eating, and we will soon see if this rhetoric is matched or contrasted with real action by the United States, which under President Bush has been the worst “climate skeptic” refusing to take action.

The Poznan talks ended early Saturday morning, and there will be many more meetings next year as the countries race to reach a global deal on actions by December.