15 October, 2009

Facing the climate change threat is not about sacrifice, it is about opportunity for human progress

There is a missing link in the mainstream discussion about climate change mitigation. We’ve been talking about the risks and worse-case scenarios, when we should be highlighting the flow of benefits that such endeavor would carry.

Sergio Abranches

The Brazilian government, for instance, is divided about the country’s standing in Copenhagen. The Environment Ministry has proposed stabilizing the country’s emissions relative to 2005 by 2020. The Ministry’s proposal shows that this is a feasible target requiring minor efforts compared to the gains it entails. Most of the job would be done by reducing deforestation, and stopping building coal and oil-fired power plants. This scenario for a 20% reduction of emissions would be possible maintaining a rate of 4% of annual growth of GDP with the same – and outdated – economic model we have today.

The likely presidential candidate and Lula’s present Chief of Staff, minister Dilma Roussef refused the proposal asking for growth rates of 5% and 6%. One decade of an average 4% annual GDP growth is already a high enough goal. This squabbling about average growth rates seems oddly misplaced.

The Minister of Foreign Affairs, Celso Amorim, argued that this is not what the world is asking from emerging countries. We could do less. The Brazilian chief climate change negotiator Luiz Alberto Figueiredo Machado stated that “financing and an inadequate level of financing are a deal breaker for us.” Brazil wants developed countries to finance its emissions reductions. So do China and India. Financial aid is certainly part of the deal, but it is far from being the core issue.

Mediocre goals, wrong views, petty demands. Emerging countries’ obligations are not related with what is being asked from them by other nations. It is about their people’s future and wellbeing.

The controversies over the US climate change bill are not too different. They dwell around costs, sacrifices losses.

What is missing? Talking about the benefits of a transition to a low carbon society. Not only the obvious ones related to mitigating global warming and reducing the risk of cataclysmic climate change. Not the ones related to the public health and welfare gains of reducing pollution, increasing tree coverage, or protecting clean water sources. The missing links in the discussion about the route to a low carbon economy are the short to medium term purely economic benefits it entails.

Most of the discussion treats the money to be used to achieve reductions of emissions as expenditure, rather than as investment. Yet most of it is reproductive investment: it generates demand for new goods and services, and it creates jobs.

The view that sees a risk to GDP growth is a static one. Shifts in the supply-chain are not adequately accounted for; feedback effects are absent. When looked dynamically, what one can see is that most localized losses represent increasing gains elsewhere. Employment reduction and increased costs in the fossil fuel sectors, lead to job creation and cost reductions in clean tech and clean energy sectors. Retrofitting adds new momentum to the industrial and commercial building industries, creating new demand and generating jobs. New demand for goods and services that increase the energy efficiency or replace carbon-intensive activities with low-carbon ones are opportunities for investment and jobs in many other sectors of activity. Investment and job creation have always meant more income. More income has always meant more savings (and investment) and more consumption.

A recent report, “Clean Tech Job Trends 2009”, from Clean Edge, shows that “from wind-turbine production line workers in central Pennsylvania and ethanol distillers in São Paulo, Brazil, to smart-grid software designers in northern California and PV manufacturers in China’s Jiangsu province, clean tech has come a long way from the “alternative energy” pioneers of off-the-grid solar and other first-generation commercial technologies of the 1970s. And the clean-tech field is hot, particularly among younger students and graduates of community colleges, universities, and business schools and those in the high-tech centers of Abu Dhabi, Silicon Valley, Singapore, and Tokyo.”

A study by University of Massachusetts’ Political Economy Research Institute states that “investments in clean energy in today’s U.S. economy will generate roughly three times more jobs than spending the same amount of money within our fossil fuel energy infrastructure.” In another study, PERI reports that the number of “US direct jobs created per million dollar investment in building retrofits and smart grid is far greater than direct jobs created in the coal industry, by a factor of 8:1 and 5:1 respectively.”

Moving towards a low-carbon economy is not about sacrifice. It is about opportunity, a better society, more income distribution, improving air quality, reducing poverty. That’s one of the messages we should convey today to our representatives and governments. We want a new progressive world, we want the investment opportunities, the jobs and the benefits of a low-carbon economy. That’s why we want to seal the deal in Copenhagen in December. We want to start the new year already working towards this new society.

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