The financial crisis is sending shock waves through the global economy. Stock markets are plunging around the world. Governments are bailing out banks and other companies at a staggering pace. Many people are losing their jobs, houses, and retirement accounts. The free enterprise system has lost its luster. Global power is shifting to China and other cash-rich countries which are now expected to bail out Western banks and companies.
Even while the financial crisis has absorbed our attention, the world’s ecosystems have moved closer to collapse. According to a new WWF report, climate change is happening “faster, stronger, sooner” than predicted by the Intergovernmental Panel on Climate Change as late as 2007. Climate change, water stress and growing demand are contributing to the global food crisis. And almost half of the 45,000 species on IUCN’s latest Red List are extinct, threatened or near-threatened.
In normal times, such bad news might be a cause for despair. But we don’t live in normal times. The recent election in the US has created enthusiasm for social and political change, and mobilized a new generation of activists. Barack Obama has made the promotion of clean energy one of his top priorities. Parliaments in several countries have approved huge bailout packages for their banks, and the conditions under which these funds are invested can still be defined.
The economic meltdown and impending political change are a huge opportunity to redefine global economic policies in a way that address rather than deepen the environmental crisis. The time is ripe for a Green New Deal. Here is an agenda for change:
- A program to promote renewable energy and to increase energy efficiency in housing, transport and industry could create millions of jobs and de-carbonize the economy. Barack Obama promised to create 5 million jobs by investing $150 billion in clean energy and energy efficiency.
- Banks need to be re-regulated so they can become the servants rather than the masters of the global economy. Speculative practices that create excessive risks should be outlawed. Strict environmental standards should be incorporated into the regulation of the banking sector.
- Taxing carbon emissions and cutting existing subsidies for oil, coal and nuclear energy can provide the resources needed to invest in a green economy. Carbon taxes can also create a safety net to cushion the social impacts of the transition to a low-carbon economy.
Groups like the New Economic Foundation, BankTrack and Friends of the Earth have prepared detailed proposals on how a Green New Deal might work. Even the UN Environmental Programme has launched a Green Economy Initiative to create green jobs and combat climate change. “Now that the once-dominant forces of market fundamentalism have been discredited, a new, equitable and sustainable future can be built on the rubble of past excesses,” the BankTrack network comments in its “Bank to the Future” statement.
The global financial crisis is also affecting our own work. Banks are tightening their lending for risky projects such as large dams. The Xalala Dam, a controversial hydropower project in Guatemala, for example failed to attract foreign investors at an auction in November. Yet the meltdown on Wall Street also threatens to dry up credit for large solar power projects which are now in the pipeline. Internationally, new financiers from China, India, Thailand and Latin America are offering to fill the gap. They have deep pockets, but often no social and environmental guidelines.
While we at International Rivers are tightening our budgets and freezing our salaries, we are also investing in programs that address the current environmental challenges and opportunities. We are strengthening our climate and communications departments. We are expanding our work on new dam builders and financiers. The financial crisis has demonstrated that self-regulation is not working, and so we are pushing for stricter standards for the global dam industry. Finally, we will move into Berkeley’s Brower Center in a few months, a model green building that exemplifies the new economy we are working toward.
As Barack Obama’s new chief of staff said, a crisis should never be allowed to go to waste. Now is the time to push for the breakthrough of a green economy. At International Rivers, we intend to be part of the global agenda for change.