Tuesday, September 30, 2008

Financial crises & climate change

I am in Queensland at the 37th Australian Conference of Economists.  I learnt early this morning about the House of Representatives rejection of the Bush bailout package with the consequent 7% fall in the Dow Jones and, as I write this, the Australian stock market has fallen by a bit less than 5% in response. The Australian market was a sea of red. What was particularly dramatic in Australia was the fall in resource stocks in response to the apparently induced fall in commodity prices. There is a fair bit of panic in the market but the broad coverage of the price falls suggests that Australian will not be insulated from the effects of this crisis. I remain pessimistic about the prospects of a catastrophic outcome from the current troubles. Even a version of a bailout is approved soon - and the facts today make this more than likely - the market is signalling that do not expect it will work.

One immediate concern for me is that the financial turbulance around the world will make political leaders shift their attention away from urgent climate change concerns. The release today of a more punchy final Garnaut Report advocating a 25% cut in greenhouse gas emissions at least as a negotiating stance in 2009 might well be overshadowed by the financial mess. Unscrupulous politicians will be aware of the implications of the recent Lowy Institute report that Australians want policies to deal with climate change but not if it costs jobs or if it hits them in the back pocket. Increasing economic difficulties will foster these attitudes.

8 comments:

ehj2 said...

I believe history will determine that Reagan was the single most devastating blow to the actual survival of civilization.

His first acts as President included removing Carter's solar panel from the White House and heading up the Department of Energy with people dedicated to destroying it (a move that would be repeated by subsequent Republican Presidents).

If, in the last decades, instead of building a military-industrial-complex (which "burns" about $1Tn/yr now and makes stuff we shouldn't use) we'd built an energy-industrial-complex, we'd be an electric economy today trying to figure out how to clean up the oceans and pull carbon out of the air.

Instead, we must now solve two huge technical challenges at once with commensurately large infrastructure replacement projects -- (1) peak oil is here and we must find an alternative to sticking a straw in the sand and having free money flow out (the 300Mn people in American want 100 quadrillion BTU's per year), and at the same time (2) we must get off carbon (making the increased burning of coal throughout the world extremely problematic).

ehj2
yank

ehj2 said...

Sorry, meant to attach this.

The Energy Program started by Carter and killed by Reagan.

http://www.pbs.org/wgbh/amex/carter/filmmore/ps_crisis.html

It seems prescient now. But three decades lost to corporatist and Republican lies.

ehj2
yank

jc said...

Yes, of course Reagan even causes car accidents these days.

jc said...

I blame Reagan for my IBS problems. I also blame him for getting older.

ehj2 said...

I know I'm confronting a religion here (Reaganism, invented and fostered by the right wing), but with the interlinked global challenges we're facing, a rebuttal might hope to bring more than misplaced anger to the table.

/ehj2
retired yank engineer

jc said...

yes, Reagan was responsible for the AIDS outbreak too, E.

Anonymous said...

I'm not one to defend Reagan, but it wasn't his first act as president to remove Carter's solar panels, or even an early act. It was done in 1986, 6 years after Reagan came in, and it was done to fix a leak in the roof. Although the panels were supposed to be reinstated, they never were.

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