Barack Obama – can he fix the economy by fixing the environment?

Feature Story - 2008-11-19
How can we use the financial crisis to solve climate change? Yang Ailun, Greenpeace China Climate and Energy Campaign manager, looks to America's new President-elect Obama for the answer.

Barack Obama has promised to invest $150 billion over the next decade into renewable energy

International efforts to tackle climate change have fared badly under the eight-year tenure of US President George W Bush.

The US bears the most responsibility globally for the growing climate change problem. Not only has the US been unwilling to voluntarily reduce its own emissions but it has obstructed the course of international negotiations on stopping climate change.

In contrast, President-elect Barack Obama has publicly pledged to commit the US to stringent greenhouse gas reductions. After his election on November 4, the whole world is now waiting for this "climate change saviour".

But as Obama prepares to take office, the US is suffering from its worst economic crisis in 20 years.

Bush's most frequent excuse not to take action on climate change was that it would hurt the economy. So how can Obama both rescue the economy and the environment? The answer is simple - by investing in renewable energy he can stimulate the economy.

In fact, during his election campaign, Obama was suggesting a joint initiative to safeguard the climate and boost economic development. Obama has said he wants the US to cut its greenhouse gas emissions by 80 percent by the year 2050 and he is also a supporter of a "cap-and-trade" programme to control greenhouse gas emissions, and using funds generated by that to invest into renewable energy.

He has also proposed setting up a US$150 billion fund for developing green technology over the next 10 years and out of this creating five million new "green collar" jobs.

He plans to raise the percentage of energy generated by renewable sources from today's 8 percent to 12 percent by 2012 and then 25 percent by 2025.

Following his election, Obama reiterated that his most urgent task once he sets up in the White House is tackling the financial crisis by investing in green technology.

He understands the crucial role this "green revolution" has in resurrecting the US economy. He recognizes the connection between economic recovery, renewable energy and stopping climate change.

The key way to solving the climate crisis is to reduce our use of coal, oil and other fossil fuels as energy sources and to switch to cleaner ways of generating power. We must become more energy efficient and focus on developing renewable sources of energy.

In this way we can we heal the economy, boost industry and improve livelihoods. And if these measures are supported by strong and vigorous government policies then they can be a new driving force for economic development.

Obama has proposed encouraging car manufacturers to produce more energy-efficient vehicles and to give tax credits to buyers. In this way he can support the recovery of the troubled vehicle industry and at the same time benefit consumers. In the long term, such policies can help protect the US from the fluctuations of global oil prices.

Guaranteeing energy security is also one of the most crucial factors in securing economic recovery.  Relying on overseas suppliers for its energy resources has long hurt the US economy. Increasing energy efficiency can substantially reduce the use of energy resources.

Furthermore, renewable sources of energy are available locally and are inexhaustible. Renewable energy is a crucial ingredient to any country's energy security.

These days there is more and more support for stimulating the ailing economy by tackling climate change.

Xie Zhenhua, vice director of China's National Development and Reform Commission and the man responsible for steering the government's climate change policy recently said that , the financial crisis has given China and the world a great opportunity to transform economic development, consumer behaviour, people's lifestyles, and the structure of the economy and industry.

New economic opportunities will be created by reforming our energy industry and dealing with climate change.  Conversely, if we do not take this opportunity to tackle the climate crisis we not only miss a great chance to solve the financial crisis we will also have to suffer the disastrous effects of global warming which will further bruise the world economy.

Former World Bank chief economist, Sir Nicholas Stern, has warned against using the financial crisis as an excuse against developing a low-carbon economy, emphasising that the economic loss from the effects of climate change will be even more serious than today's current crisis.

A few years ago Stern published his now famous "Stern Review" in which he argued that if each country does not take serious action to address their greenhouse gas emissions within the next 10 years then the world will pay a huge cost - greater even than the combined economic loss of last century's First World War, Second World War and the American Depression of the 1930's.

Obama also recognises that economic recovery may be a short-term task but dealing with climate change is a long-term task. Supporting energy conservation and the development of low-carbon industries such as the renewable energy industry will not only help us to overcome the present economic crisis but also will also help with long-term sustainable development.