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Recession might promote a green agenda [Mar. 9th, 2009|09:01 am]
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A friend who helps run an environmental consultancy asked me the other day about ways in which the recession might promote a green agenda, rather than damage it. Thinking about our conversation it struck me that there were at least three ways in which the current recession was likely to have a positive effect - and we will leave aside the obvious one that in the short-term a slow economy cuts energy use and carbon emissions.
1. Low interest rates associated with the downturn make energy-saving investment cheaper. Often the trade-off is between energy costs and finance costs: more investment reduces energy use but  costs more up-front. As funding costs come down - as they will - projects that would not fly suddenly look attractive, particularly as a preparation for higher energy costs in the future.
2. Recession forces innovation even without investment: figuring out how to simplify work-practices as a way of cutting costs. But in cutting costs you often also cut energy use, almost as a sidebar to the main objective.
3. There is great pressure on management structures, with new people being appointed and others moving on. One of the first things any new manager does is to look at the work-flow: who does what and how might this be streamlined. So the very fact that management is changing itself encourages efficiency, which in turn will on balance help environmental objectives.
So though the headlines may be about recession rather than the environment, on the ground it has made the environment a more important issue in many practical ways.
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Comments:
From: anthonyclayton
2009-03-09 04:50 pm (UTC)

Recessions and energy policy

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Dear Hamish,

You made several interesting points in your blog. One thing that does worry me, however, is the way that investment in non-fossil fuel technologies also tends to track the price of oil. The low oil prices that result from a recession reduce investment in both oil and new energy technologies, thereby creating the conditions for the next surge in energy costs. There are, obviously, negative effects both ways; high oil prices increase costs and slow growth in importing nations, but low prices cause problems too.

We need to break this pattern, because our current high level of dependence on hydrocarbons for energy has a particularly wide range of negative consequences, including the contribution to climate change, growing energy insecurity, resource nationalism, and an increased possibility of terrorism, tension and conflict over remaining resources, while also supporting corruption and undermining democratic reform in some oil-dependent exporting states. This combination means that price volatility is likely to be higher in future, so the risk of economic shocks will increase.

We've just lived through this, of course - between 1999 and July 2008, the price of oil rose 15-fold, from less than $10/barrel to over $147/barrel. Then the price slumped as a result of the current recession; oil lost nearly 80% of its value. It was trading at less than $34/barrel in December 2008. Such dramatic shifts are highly destabilizing.

There are also political risks; the rise in the price of oil has been strongly correlated with the increased assertiveness/belligerence of petro-states such as Russia, Venezuela and Iran, all of whom have used part of their revenues to support armed factions in neighbouring states.

It would therefore seem sensible to develop a long-term policy to promote energy efficiency and the development of diverse low-carbon energy sources in order to reduce the risk and incidence of these various damaging consequences. To do that, however, we need to be a bit more strategic, and a little less driven by the current price of oil.

Obama's energy plan (to eliminate US dependency on imported oil within ten years) looked like an impressive move in that direction, but it then got bundled into the larger stimulus package, and now looks a bit lost inside a vast and rather pork-ready set of commitments.

best regards,

Tony

From: jeffmowatt
2009-03-11 11:57 am (UTC)

Recession and economic development

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Dear Hamish,


I was just participating in the Sustain IT forum to describe the work we'd been doing as a social enterprise advocating microeconomic strategy to leverage investment and create businesses through microfinance.


In Russia it began after their collapse in 1998. More recently we've been directing our attention toward Ukraine which is now in a critical economic condition.


What you may see from the strategy paper we delivered in 2006 are recommendations which have since been incorporated in the US stimulus plan, rural broadband, social enterprise and funding support for it.


Unfortunately these are ideas which have yet to make an impression in the UK.


http://forums.independent.co.uk/btforum/btforum/viewthread_thread,16


Regards, Jeff
From: houstonlocators
2009-09-17 06:57 pm (UTC)

Recession Promotes Green Agenda in Texas Apartment Construction

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Dear Hamish,

My name is Kho Raja I am in the houston apartment locators field. I have already seen several apartment communities adopt green agendas this year by substituting raw materials for recycled materials. As we all know the effect of recession has caused raw materials and construction costs to go up. The property that has set the benchmark here in Texas is Gables Pressler. They are able to capitalize on green amenities like recycled bamboo floors, standard solar shades, fluorescent light fixtures, and a re-charge station for electric cars.

In austin the movement towards a green agenda is so widespread that these demographics will in fact spend the extra money to be tenants at these green friendly apartments while still accomplishing saving the planet and living the luxury modern lifestyle.
From: biochem456
2010-12-15 04:29 am (UTC)

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High taxes can help as well ;)