Top of the News: It looks like the best we will get out of the Copenhagen climate summit will be kicking the can down the road again. This is entirely predictable.
Nations are divided. The developing world says, essentially, hey, America and the West raised themselves to affluence by causing this mess in the first place — why should we not have the same advantages? Meanwhile, in an era where economic arguments now trump any other ethos of societal good, the costs of addressing climate change are “huge” and meaningful action is opposed by very well-funded industries.
Of course the costs of doing little or nothing are even bigger. But they lack the backing of vast lobbying money as well as being difficult to quantify. The “winners” from inaction will eventually be swamped by these costs and resulting destabilization, too. The result: Countries and even states (if the ascendant GOP allows them once it wins in 2010 and 2012) will go it alone. For some countries, it will even be profitable.
Rachel Ziemba, a senior analyst at Roubini Global Economics writes, “it’s worth pointing out that 2009 is a year in which government investment in renewable energy and energy efficiency programs increased due to green stimulus projects.” Indeed, China has declared renewable energy a “strategic” industry and is using protectionism to try to dominate it globally. China and Europe are building high-speed rail.
None of this will be enough to avoid potentially catastrophic consequences from climate change. One school says, “We’ll adapt.” Maybe, at very high costs. But those will only be apparent in the years to come. (I suspect the Easter Islanders and Anasazi said much the same thing).
The Back Story: “The great stabilization” is what The Economist is calling our current becalmed state. But the term is misleading.
“The bad news is that today’s stability, however welcome, is worryingly fragile, both because global demand is still dependent on government support and because public largesse has papered over old problems while creating new sources of volatility.”
I’ll stick with the Great Disruption, of which the financial panic, recession and jobs crisis are only a part. The hits will keep coming — the result of fundamental discontinuity. Most can’t imagine different ways of arranging our lives or economies (see Copenhagen impasse). So it will be done for us by the rough justice of events.
Today’s Econ Haiku:
Better keep that Saab
Is in your garage