The Recession Represents an Ideal Opportunity for Public Investment in Green Technologies

The current economic woes gripping the world have led to unprecedented actions from governments as they attempt to keep their economies afloat. The British government has pumped something like 40 billion pounds directly into the banking system, underwritten hundreds of billions in credit guarantees and provided huge levels of tax relief in an effort to get the economy moving again. Although it is understandable that these matters occupy the government’s focus at present, is it right that environmental issues be sidelined until economic fortunes turn around?

Clearly, the structural reforms that are needed to turn western economies towards a low-carbon future cannot be done on the cheap. Money is what will make this happen and it is unrealistic to think otherwise. Only a healthy economy can generate the required capital while also maintaining the way of life people are unwilling to change. Should we wait until we are in a better financial position before we do anything substantial about it?

There are many reasons why today represents the best opportunity to seize the moment. Firstly, and perhaps we should step back for a moment from our wholly human difficulties, the earth won’t wait. Climate Change is happening, recession or not. If economists are right, we will see economic growth return to trend in 2010 at the earliest. If we sit and do nothing, another year or longer will pass with no progress made towards substantive investments in renewable energy sources.

The overwhelming economic argument for action of this kind has been highlighted in, most notably, the Stern report. Even the most optimistic scenarios predict economic calamity in the coming decades. It is easy for such warnings to wash over one’s thoughts, but think of it in these terms; if today’s economic predicament is really as bad as anything since the Great Depression, imagine the torment which awaits us when the fallout from Climate Change begins to bite. We may sneeze today, but tomorrow we face severe fever.

With all the money which has been pumped into the financial sector and the wider economy by the government recently, one may ask whether it is sensible to throw yet more money at a problem which does not represent an immediate threat. Well, consider this. A massive investment by the government in renewable energy systems for people’s homes would help keep blue-collar workers who are traditionally reliant on the construction industry in work. The skills of plumbers, electricians and builders could be utilized at a time when spare capacity is risking the existence of many such businesses.

Creating the demand for domestic-scale low-carbon products would provide a much needed shot in the arm for the struggling manufacturing industry and spur development of the high-end green sector economy in general. Politicians and industry figures alike often tell of how well placed Britain is to exploit the opportunity which future growth in this sector represents. If ever there was a time to throw the treasury sink at a future growth opportunity, now is surely it.

Opportunities for the government to sell this to the public are numerous. Spending of this kind could reasonably be argued to meet the (now defunct) golden rule of borrowing only to invest. It could be labelled as an investment in people, their properties, their ability to weather utility price spikes, the economy in general and the planet.

It is difficult to argue that the government has not been bold in tackling the economic crisis. Now is the time to do the same here and match the green rhetoric which it preaches to the rest of the world. To do so would be beneficial to all of us and all our children.

This article was first published in London Progressive Journal on 5th December 2008

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