Toronto Star (Toronto, Ontario, Canada) January 26, 2008- Earth Hour - Could market bust spell green boom? Peter Gorrie ENVIRONMENT REPORTER This week, stockJan 26, 2008 1 of 1View Source
Toronto Star on slowdown and environmentToronto Star (Toronto, Ontario, Canada)January 26, 2008-Earth Hour - Could market bust spell green boom?
This week, stock markets thrashed wildly, the Bank of Canada warned of tough economic times, and the United States languished on recession watch. Environmentalists aren't sure whether to grin or groan at this avalanche of gloomy news.
Common wisdom is that the environment is a good-times issue, a luxury. When the economy tanks, so do thoughts of turning green. That happened in the early 1980s and again a decade later when economic booms turned to busts.
But it's not that cut and dried. With little hard evidence to go on, good arguments can be made that a recession is either good or bad for the environment.
While some argue that households or companies that want to prosper should go green, in a recession individuals can't spend on energy-saving appliances or major home retrofits.
Shoppers are more likely to choose cheap factory-farmed foods over more expensive organic products and donations to environment groups tumble.
The tendency is to think of short-term economic survival rather than longer-range benefits.
On the other hand, economic activity slows down. That means fewer resources are consumed, so pollution and other environmental damage should decline.
North America's greenhouse gas emissions dropped in 2001 thanks to the dot-com bust and the 9/11 terrorist attacks. When the economy recovered from those shocks, emissions resumed their rapid ascent.
With thin wallets it makes sense to cut expenses.
That's another potential gain for the environment if it means people take low-cost steps to cut their energy use - the measures being promoted in the run-up to Earth Hour.
And for businesses, a recession can provide an incentive to go green, says Tima Bansal, an associate professor at the University of Western Ontario's Ivey School of Business.
Increasingly, companies realize the conventional vision of a contest between environment and economy isn't accurate, Bansal says.
The environment is about resources. They also drive much of the cost of doing business. Firms that consume less, save money and boost their ability to compete.
That means if companies can see beyond immediate survival, tough economic times could help the environment, Bansal says. "When you're doing well it's hard to motivate change. A recession could lead to the demise of old business methods and products" and the emergence of new ones.
On the other hand, notes Chris Green at McGill University, research and development budgets are usually among the first to be squeezed in a budget crunch.
The search for a link between environmental and economic health is meaningless, he says, because of the difference in time frames: Recessions might last a year; green issues are much longer term.
"In a recession you might take your eye off the ball; you've got other things to be concerned about," Green says.
But, "I'm not sure if you can draw conclusions from that ...I'd be very surprised if the environment didn't remain a very important thing in terms of the agenda in Canada."
An ultimate link was spelled out in the late-2006 report by economist Sir Nicholas Stern, which warned that if we don't stop climate change, the world could be plunged into the worst recession in recent history.
"The most likely way the climate could be influenced by either natural or artificial means seems to be through a trigger mechanism that ultimately changes the radiation balance .... Still another possibility would be a change in the relative proportion of atmospheric gases ... the burning of fossil fuels would presumably lead to more absorption of long-wave terrestrial radiation in the atmosphere and consequently to greater heating."
Abraham Oort. "The Energy Cycle of the Earth," Scientific American. September 1970