Is the Financial Crisis More Dire than the Climate Crisis?

Not even close.

If there's no action before 2012, that's too late. What we do in the next two to three years will determine our future. This is the defining moment.

So warned IPCC head Rajendra Pachauri last fall when the IPCC released its major multi-year report synthesizing our understanding of climate science. And remember Pachauri was handpicked by the Bush administration to replace the "alarmist" Bob Watson. It's the facts that make scientists alarmists, not their politics (see "Desperate times, desperate scientists").

What happens if we fail to act in time to avert the climate catastrophe?

• We cross carbon-cycle tipping points, such as the loss of the tundra, beyond which there is "no redemption."


• We head toward CO2 concentrations this century that are triple or quadruple preindustrial levels.


• We should expect 0.8 to 2.0 meters of sea level rise this century, inundating the homes of 100 million people.


• We face desertification of one third the planet and loss of the glaciers that provide water to a billion people.


• We face loss of more than two thirds of the species on the planet, and a hot, acidic, and largely lifeless ocean


• We face humanity's self-destruction -- 6°C total planetary warming.

Worst of all, this utterly preventable catastrophe is probably irreversible on a time-scale of centuries, and thus threatens the health and well-being of our children and the their children and the next 50 generations.

A trillion-dollar climate rescue package would put us on the path to avert these catastrophic outcomes, jumpstart the transition to a clean energy economy, while largely paying for itself in energy savings. It would also sharply reduce the $10 to $20 trillion transfer of wealth to the oil exporters that we can expect over the next quarter century alone. Air pollution would drop sharply and millions of jobs would be created.

What happens if we fail to act in time to avert the financial catastrophe that Treasury Secretary Paulson says is now upon us:

• Companies that made very bad investments would lose money, and some would go bankrupt.
• Other countries would probably stop lending us as much money until the shakeout was over.
• For a time, we'd have to stop living beyond our means with borrowed money that pays for massive imports from China and the oil producers.
• More people who bought houses they couldn't afford would lose them.
• Our economy, which had been boosted unsustainably by phony wealth and a housing Ponzi scheme, would no doubt underperform for a few years until the shakeout was over, causing hardship for tens of millions.
• This might trigger a global economic slowdown, causing hardship for hundreds of millions.

It is insane to glom together a trillion-dollar taxpayer-funded legislative response to this crisis in a few days while utterly ignoring the infinitely graver climate crisis.

At the very least, we should combine whatever financial bailout is deemed necessary with the $100 billion "Green Recovery" effort proposed by the Center for American Progress (where I'm a Senior Fellow). That would that create 2 million new jobs nationwide in two years and start "the reconstruction of local communities and public infrastructure all across America, setting us on a course for a long-term transition to a low-carbon economy."

Also, the Green Recovery would also help ensure that whatever dubious financial instruments the taxpayers are stuck with in the Bush Bailout, they have more value because the U.S. economy and its infrastructure -- and thus housing values -- would be fast-tracked to sustainable health.

Personally, while I don't much believe anything this administration says, I am willing to believe credible financial experts who have been warning for years about the dangers of unregulated financial system.

But why in God's name won't this same administration and the nation's opinion leaders and conservative politicians and the media and the general public believe the far greater number of far more credible scientific experts who have been warning for years about the dangers of unregulated greenhouse gas emissions.

The pundits now say this trillion dollar bail out means that the next president won't have the resources to pursue the transition to a clean energy economy, assuming the next president actually believes in using the tools of government to achieve that transition. Along the same lines, the European media reported today that "The recent economic downturn could push the European Union to adopt more modest ambitions in its fight against climate change."

That would be tragic. In a couple of decades, nobody is going to remember this "greatest financial crisis since the Great Depression" because the nation and the world will be desperately devoting all of its economic resources in a last-ditch effort to avoid the catastrophic climate outcomes described above.

People always tell me we're incapable of taking the steps needed to act on global warming until the impacts are so bad that it is obviously too late to act. And yet, here we are, apparently on the verge of devoting $1 trillion to prevent a financial meltdown -- not waiting until another Great Depression to redesign our financial system.

Now it is certainly true that you can't replace key elements of the entire energy infrastructure as fast as you can redesign key elements of the financial system. As I have argued in my book and many others have argued, though, if we ever did take a World War II style approach to redesigning our energy system, we could do much of what needs to be done in a couple of decade. But, of course, you have to start. Now.

For the rants thoughts of other blogs, see "Big Government: Darn Handy in a Crisis" and "Wall Street Meltdown and a melting globe."

Comments

[ewoman]

Joseph - I'm so sad about this bailout, and your commentary just tripped a switch in me. I sat here and cried - not for myself, but for my daughter and what she will have to face thanks to this administration - the only one that my daughter has known. I haven't owned a car for over a decade, and I try to live frugally and as green as possible. I do it for my daughter. But it feels like I'm fighting an uphill battle.

I'm sure I'll get angry tomorrow (isn't that the next stage in the grieving process?), so I went to the "Green Recovery" project at Center for American Progress (from your link) and signed up for the action alerts and several newsletters. Hopefully, I'll find something there tomorrow that will help me direct my anger in an positive manner. Thank you.

[jeanrenoir]

With respect, the climate crisis is TOTALLY irrelevant to this election. Everyone who cares about this crisis is either already passionately for Obama, or so selfishly wedded to the Bush taxcuts or to the neocons' cosiness with the Republicans that he or she is lost to Obama anyway. It's hardly likely that Obama himself needs reminding of the issue; if elected, by some miracle, he will be 100 times better for warming and the environment than McCain. That said, Obama and everyone who supports him should simply forget the climate crisis for now and focus EXCLUSIVELY on the issues that Rust Belt working-class Dems care about. These people, as always, will decide this election, not environmentalists. All who care about the environment, like all who care for progress for poor African-Americans, should forget these topics and do all in their power to appeal to working-class whites. Otherwise, you will be part of the problem (the triumph of McCain), not part of the solution (the triumph of the intelligent guy in the race).

[idyl]

An important reminder of why the stakes are so high. Universal health care can actually save us money (looking at the experience of other countries). So too with climate change mitigation and the development of alternative fuels and green technologies. But Bush Inc. seek to saddle the next president with a debt load that is beyond imagination, and threatens the very long term "solvency" of the government. I don't see the wisdom of simply moving debt around as if it were musical chairs: from Wall Street, to the Taxpayer, to the deficit (and our creditors overseas). Why not make Wall Street pay for its mistakes?

The bailout should be a "pay as you go" initiative. We could tax financial transactions/instruments to help capitalize some of the bailout (so that the industry that created the problem can be a part of the solution). I am told that a one penny tax on every dollar traded on U.S. stock market (bought or sold) would raise $300 billion/year. We could run this program for two years (raising $600 billion). The global community could also pitch in, and there are certainly many other financial instruments/assets that could be taxed. The banking and financial sectors should have no leverage in these discussion (should be 100% invested in solving the problem), and regulators should be primarily focused on assuring the viability of capital markets for Main Street, and the overall soundness of the economy. And yes, a surplus for capital improvements.

[UnbiasView]

"Universal health care can actually save us money"

Sounds great, adding 75 million people to a payroll doesn't save anyone money and government never saves any money . . . if they did their spending wouldn't go up every day would it?

[EbonBear]

Current amount spent on private healthcare by Americans: aprox. $2.3 trillion
Current amount spent on Medicare/Medicaid: $558.1 billion
Combined cost: aprox $2.858 trillion per year (all figures from NYT)

Cost of providing NHS style healthcare to all Americans: aprox $600 billion
Cost of providing French (generally accepted as world's best) style healthcare to all Americans: aprox. $900 billion

Yes, even including start-up costs, universal healthcare would save the US vast amounts of money.

[DiscoStu]

Do you mean the same Bush Inc. that's in control of Congress? Nancy Bush and Harry Bush and Joe and Barak Bush? Are they the people voting to bailout banks? Yep.

Bush Inc. ,as you described them, was in charge of Hurricane Katrina relief. You want them to run the mortgage industry and healthcare and the markets in general?

Another Maroon

[RI]

Sorry, the money is all tied up for unnecessary wars and corporate greed relief.
Better luck next century... if there are any people left.

[UnbiasView]

Yeah . . . if there are any people left.

[jbd]

We will be out of oil by the next century. How will the US military run it's tanks and fighter jets? Any answers dillweed? The most obvious changes are occuring in the Artic. When that ocean loses it's icesheet and starts to get solar gain year round things will not be turned around. We've hit peak oil and we are about to hit the tipping point on global warming.

[Rothgar]

In a classically facist state taking care of the corporations is job one. Sorry but that is simply the definition.
Hopefully there will be some money left to attempt to recover from the huge looming environmental issue.
What do we think would happen if these bailouts were stopped? Wouldn't be within the perview of the Congress to stop these bailouts? Congress after all allegedly controls the money.