(Draft. Please don’t quote without asking author.)

“Our businesses are in absolutely no position at the moment to absorb the costs of the regulations that have been proposed.” (Silvio Berlusconi 15 October 2008)

“It is important to understand that climate change is not an optional extra, […] It’s a challenge, a real challenge that does not disappear because of the financial crisis.” (Gordon Brown 15 October 2008)

Climate change is partly anthropogenic, it poses a severe global risk, and global cooperation is needed in order to avoid that the risk turn into a global ecological crisis. However, there have been warnings that the ongoing global financial crisis will overshadow the attention given to global climate change.

There are some reasons to take these warnings seriously. For instance, while the financial crisis is tangible, immediate and affects people in the geographical core areas of the global political economic system, global climate change is relatively incomprehensible for non-natural scientists, and its affects, at least for people in the core, are not yet felt. Someone once said that “Men are so simple and so much inclined to obey immediate needs that a deceiver will never lack victims for his deceptions”.

So, from the perspective of capital interests and elected governments in the core, it seems feasible to focus on the financial crisis and to postpone serious climate change adaptation and mitigation initiatives. Research has also shown that policy makers tend to be reluctant to emphasize and enforce strict environmental policies during economic downturns. Adding to these concerns are the fact that rich countries have managed to mobilize so much capital in order to deal with the financial crisis while rather little substantial has been done to address climate change or the global food crisis.

Howard Stern see two potential dangers of the financial crisis for climate change action: “One [is] people can only concentrate on a limited number of things at the same time, and the second is people will be sensitive to cost increases, and those will have to be managed carefully.”

However, careful optimists like him hope that the financial crisis may indeed facilitate “greening” of the global economy – if leaders point to the urgency to act and if they manage to cooperate internationally (Jowit 2008). According the ecological modernizers point of view, technological change spurred by institutional incentives, leadership and cooperation will fix “the greatest market failure of our time” – global climate change – and thereby lead to a higher stage of development. At the same time Ulrich Beck have also pointed to the peculiar fact that politicians and capital owners who praised the wonder of deregulation and privatization less than a year ago now propagates recourse to massive government intervention. Ideally this sudden swift of world views could be successfully matched with investments and government regulations in favour of low- or non-carbon infrastructure etc. Moreover, even counterpoint views questioning belief in ecological modernisation and compatibility between the growth imperative and social-ecological imperatives (e.g. Daly & Douthwaite) may gain ground as a result of financial crisis.

In any case, governments alone cannot determine the global outcomes; global cooperation is needed. Therefore the case of the European Union is of great importance. EU is a diverse community with many competing views. Combined it is one of the greatest emitters of green house gases but it aspires to lead the world in cutting greenhouse gas emissions and it acknowledge the need to address climate change as well as the financial crisis at the regional as well as the global level. Moreover, EU may be an early exemplar of an ascendant multiregional world order (as suggested by e.g. Hettne & Söderbaum). EU’s policy to mitigate and adapt to climate change have been both criticized and praised. Alternative critics argue for instance that the strategy places too much trust in the market and technological fixes and that there is too little vertical interaction e.g. between Brussels and grassroots civil society. But regardless of the eventual strengths and weaknesses of EU itself and its climate change and overall environmental strategy, its environmental regulatory framework is one of the most influential suprastate ones around.

However, the quarrel between fossil fuel industry huggers and ecological modernists within EU will go on. EU recently reached an agreement around an “ambiotous package”. But top-leaders say that it should be introduced in a “cost-effective manner … having regard to each member state’s specific situation.”

What incentives do the emerging economies have if EU (or USA) can’t take a firm leadership position?

(c) Jesper Karlsson 2008.