Not rebuilding for tomorrow

December 19, 2009

The global meltdown led to expectations governments would use money to reinvent economies for climate change. The plan was simple: spend obscene amounts of public money in infrastructure and other projects, to stimulate national economies. If this money got spent on all those things which would improve the environmental sustainability of countries, it would go a long way in building the foundation for the new-age world. It would make us climate-proof and insure us against the excesses of an out-of-control market.

Such expectations are now belied. The British pink daily The Financial Times’ analysis of the green bailout plans of various countries finds that other than China and South Korea all current climate sinners have committed too little on fixing economies for a different tomorrow. Japan will spend as little as 3 per cent of its bailout on a green stimulus, Canada 8 per cent and Australia 9 per cent. Remember, these are countries with high, and growing, emissions; they really need to cut back.

Even for the US, where President Obama promised a jobs package for a green economy, the score card is dismal. The country will spend on green stuff 12 per cent of its almost US$ 1,000 billion package. Seems substantial—US$ 112 billion, divided among investment in smart grid, energy efficiency, renewable energy tax credits, public transport and high-speed rail (US$ 9 billion). No doubt positive, when we consider how little governments have spent on what clearly promotes affordable and equitous growth. But the fact remains the US, like the other countries, will spend the bulk of the bailout creating more problems and more emissions. The little spent on clean-up is just not enough.

It is peanuts for monkeys in a scenario in which these countries have to cut greenhouse gas emissions by at least 30 per cent by 2020 and over 80 per cent by 2050 over 1990 levels, even according to the same economists who are teaching them how to get out of the financial mess. If we accept that most of these countries—the US, Australia, Japan, Canada, to name a few—have increased their emissions 20-40 per cent between 1990 and 2006, we are literally talking of re-inventing economies on a massive scale. This is far from being done. In a few months or years’ time, the rich world would have crawled out of recession, but by creating a world which can and will emit more, not less. Disaster.

It is South Korea and China that are taking change seriously. According to The Financial Times, China will spend almost 40 per cent of its US$ 516 billion, and South Korea as much as 80 per cent of its stimulus, on green projects. China will invest the bulk in railways and on projects for energy efficiency and low-carbon vehicles. The relatively small country of South Korea will spend an amount equivalent to the continent-sized US on public transport.

What do these green investment plans actually mean? It is clear transport is a climate pain—we know greenhouse gas emissions from this sector are high and growing—that requires intervention. But each country’s plans differ— in content, intent and in terms of real impact. The world’s green preacher, the EU, has decided to spend safely in ways in which it can be green yet benefit its powerful automobile lobby. The bulk of the stimulus will go into “scrappage bonus”—paying people to replace old cars with newer, more fuel efficient vehicles. But the fact is this would mean more cars have to be manufactured, more material used, more energy consumed: good news for the economy, bad for the environment. Furthermore, there is as yet no evidence to prove more efficient cars lead to lower emissions on the whole. In fact, all surveys have found that even as vehicles become more fuel- and emission-efficient, the total greenhouse gas emissions increase, for people buy more and drive more. Thus, old-style stimulation is bound to fail.

The other biggy is energy. Here, too, little big-ticket change is anticipated. The US is the leader in reducing energy flab. It will spend on modernizing its electricity grid, shape up supply and on energy efficiency in various forms: “weatherize” homes of more than 1 million families by better insulation; refurbish federal buildings to a higher standard of energy; train workers to install insulation and other energy-efficient material.

The European Commission, perhaps because it has less energy flab, has different plans. It will spend the bulk of its green stimulus on an experimental technology—carbon capture and storage (ccs, trap carbon emissions from power plants and bury it underground). It has set aside roughly US$ 2 billion of its US$ 6.3 billion package for five ccs test projects in Germany, the UK, the Netherlands, Spain and Poland. But as it is not clear this burial will work, the obituary can be written.

What is most disturbing is that investment in renewable energy remains a small part of the package. The US has perhaps the biggest, yet smallest, bailout—some US$ 6 billion for new loan guarantees and tax credits for wind, solar and geothermal, including the cost of building new transmission lines to connect wind farms. So much for the so-called sunrise sector of our new dawn, that can provide millions of green jobs—in building wind, photovoltaic solar and solar thermal systems—and real answers to our fossilized energy systems. Admittedly, with the price of oil going down, these new energy sources are even more uncompetitive and more costly. But what happened to this-is-the-future call?

So, forget a green tomorrow. We will re-build ourselves the same dirty-rich economies. We will consume, to be happy, and will be happy. The climate change question can wait another day.

—Sunita Narain