Elliot Morley, BBC Green Room 21 Oct 08;
The low-carbon economy is an integral part of economic recovery, not a luxurious extra, says Elliot Morley, president of GLOBE International. In this week's Green Room, he sets out the reasons why the current financial crisis offers a unique opportunity for us to clean up our act.
The world's focus is rightly on the turmoil in the financial markets and the global economic slowdown.
Some commentators, indeed some politicians, have used the deteriorating economic circumstances to argue that tackling climate change through the transition to a low-carbon economy is a luxury item; saying it is too expensive, could damage competitiveness, and should be a secondary political objective.
This is an understandable view but, in my opinion, it is short-sighted.
The global economy and the climate system are linked and the current slowdown represents a unique opportunity to use public sector investment to kick-start the economy and build the low-carbon infrastructure we need for our long-term prosperity.
The low-carbon economy is an integral part of economic recovery, not an optional bolt on.
'Unique opportunity'
Some economists are arguing that in order to kick-start the economy, governments will need to invest in major infrastructure projects to help stimulate demand in the economy, increase investment and create jobs.
This presents us with a unique opportunity to create the low-carbon infrastructure we need for our future prosperity, such as more renewable energy generation, better public transport networks, smarter and more flexible electricity grids, "retrofitting" buildings to increase energy efficiency, and a network of pipelines to carry captured CO2 from fossil fuel power plants to storage sites under the North Sea.
This investment in infrastructure, together with policies to structure financial and industrial markets to deliver social and environmental goods, would help reignite the economy, reduce our dependence on imported fossil fuels and improve energy and climate security.
The political will has been found to stabilise the banking crisis. Now we need that same political will to tackle the economic slowdown to tackle the twin challenges of climate and energy security.
So, what are the building blocks required to generate the political support to drive economic investment into a low-carbon future?
Firstly, we need a global political agreement on how to tackle climate change beyond 2012. Most eyes are focusing on the UN meeting in Copenhagen in 2009 for a settlement.
However, if negotiations are to be successful, the political conditions must be created beforehand. The Italian G8 Summit next July is a key milestone.
Prime Minister Berlusconi has a chance to demonstrate real leadership by urging world leaders to agree the shape of a post-2012 deal and to do so against a backdrop of challenging economic conditions.
And it is crucial that the major emerging economies of Brazil, China, India, Mexico and South Africa are given an equal seat at the negotiating table.
Emerging economies will only be persuaded to take part in the transition to a low-carbon economy if we begin the discussion by recognising their new position in the world.
EU leadership is critical and it was heartening last week to see the EU Council reaffirm its determination to meet its self-imposed ambitious emissions reduction targets, and the UK's new Secretary of State for Energy and Climate Change commit the UK to 80% emissions cuts from 1990 levels by 2050.
When I was in Beijing earlier this year, the members of the National People's Congress I met told me that the EU's targets had significant influence on Chinese decision-makers. This ambition must not be allowed to slip if we are to be successful in Copenhagen.
Secondly, we need a global carbon market. Having a significant price on carbon is the single most efficient way of driving CO2 out of the economy.
The EU's Emission Trading Scheme is the foundation for this. We now need to link this to markets emerging in the US, Canada, Japan, Australia and New Zealand.
And, as recommended by GLOBE's working group on market mechanisms, in the context of the financial turmoil and the focus on market regulation, we must ensure that the global carbon market is regulated by an independent body with the authority and transparency to build confidence and ensure integrity.
Thirdly, the price on carbon must be backed with regulation and innovative financing to drive global investment into clean technology.
By setting ambitious efficiency standards on new appliances, buildings and technology, we can use the clout of the world's biggest markets to drive innovation around the world.
These actions do not just reduce emissions. They have huge economic benefits. By driving investment into clean technology and diversifying our energy resources we can help reduce the inflationary pressures and price volatility of oil, while creating jobs in all sectors from design and manufacturing, to engineering, IT and consultancy.
The benefits would not simply be felt in the developed world. Developing countries have a lot to gain too. As host nations for emissions reduction projects in the carbon market they can attract inward investment into clean energy, along with technology and skills transfer from developed countries.
Fresh thinking
As manufacturing centres for the clean technologies needed around the world, developing countries can create the jobs and wealth needed to develop their economies along a low-carbon path.
China is an obvious example. It is already the global manufacturing centre for wind turbines, a vast number of which are deployed in wind farms on its own soil. It is here we can begin to see some links between the environmental and financial crises.
It is the world's biggest carbon emitter, it holds vast reserves of wealth but, although so far it has been shielded from the financial turmoil, orders for its various manufacturing centres are set to fall as a result of the slowing demand from the industrialised nations.
This means that China too is likely to feel the downturn, but herein lies the opportunity.
China, and other countries with reserves of sovereign wealth, could invest in low-carbon as a way of reinvigorating the global economy which, in turn, will reinvigorate their own.
We have recently seen a smaller scale example with Abu Dhabi investing in a 20% share in the Thames Array wind farm. This is a sensible move from oil producing countries, diversifying their investments into the future global energy infrastructure and contributing to lower emissions.
It is an example other oil producers should follow and demonstrates that a post-2012 treaty is an opportunity for oil producers, not a threat as some currently perceive.
To help create the right political conditions for success in Copenhagen, GLOBE is launching an International Commission on Climate and Energy Security.
The Commission will comprise of senior legislators from G8 countries and the major emerging economies of Brazil, China, India, Mexico and South Africa to identify the most difficult domestic obstacles, and to explore in-depth, as well as politically test, the specific outcomes required from the G8 summit.
The work of these legislators gives me great hope that G8 leaders will rise to the challenge in Italy next year and help prepare the ground for an ambitious and effective post-2012 agreement to tackle climate change.
Such an agreement is not just necessary to protect our climate but also to provide a framework within which we can kick-start our economies, create jobs and secure our future prosperity.
Elliot Morley is president of GLOBE International and was the UK prime minister's special representative to the G8's Gleneagles Dialogue
The Green Room is a series of opinion articles on environmental topics running weekly on the BBC News website
