What would the bank-bail out money buy for the environment?

Up to $4 trillion has been committed to rescue the global economy. How could that money be spent on the environment?

John Vidal, guardian.co.uk 17 Oct 08;

Countries could protect nature, help halt climate change, and provide food and clean water for a billion people for little more than has been pledged to bail out the world's banks in the last week, according to a series of authoritative economic reports from the UN, world bodies, major charities and banks.

Estimates of the sum committed this week by governments to rescue the world's financial system range between $2-4 trillion. Investment on this scale to reduce greenhouse gas emissions and protect nature would not only be repaid up to 100 times over, say the studies, but would also save trillions of dollars having to be spent later.

So what could investment on the scale of the the bank bail-out money buy?

Climate change: Lord Nicholas Stern, who led the UK government's study of the economic costs and benefits of climate change said it would cost 1% of global GDP, or $540bn (£313bn) a year, to hold greenhouse gas emissions at a level to avoid the worst effects of global climate change. But his review for the Treasury in 2006 said that if countries did not act, the overall costs and risks of climate change would soar into trillions of dollars a year.

Eco-systems and biodiversity: A study on the costs and benefits of investing in the wealth of nature has provisionally found that most of the world's forests, mountains, rivers and seas could be protected for about $45bn annually, says Pavan Sukhdev, lead author of the EU and German government funded report.

"The economic arguments for nature protection are beginning to enter mainstream thinking", said Sukdev, whose team is due to report fully next year. Last month the team estimated that the loss of the services that the forests perform, such as providing clean water and absorbing carbon dioxide is already costing the global economy $2-5 trillion a year.

Another major study, by Shell economists working with the World Conservation Union this year, estimated it would cost $1.3 trillion, spread over 30 years, to protect the world's most important eco-systems. For this sum, nearly 15% of land and 30% of the oceans would be protected from illegal logging, overfishing, pollution and would go most of the way to protecting the most endangered animals.

Renewable energy: Switching from fossil fuels to renewable energy sources in the US alone would not only reduce the world's carbon emissions by nearly 20% but could provide hundreds of thousands of jobs, says Jeffery Greenblatt, Google's climate and energy manager.

In a major study, Greenblatt proposes spending $4.4 trillion, spread over 30 years, to replace all the US's coal- and oil-fired electricity generation renewable electricity. The Google plan would generate 380 gigawatts of wind power, 250GW of solar power and 80GW of geothermal power, as well as reduce US energy use by 33% and boost sales of plug-in hybrid vehicles to 90% of new car sales by 2030.

Britain's more modest plan to generate 36% of all electricity from renewable sources by 2020 is roughly costed by the Treasury at $100bn, over 12 years.

Water and sanitation: International charity WaterAid this week estimated that providing safe water and sanitation to the 2.5 billion people in the world without it would cost £37.5bn. This, said a spokeswomen, was about equal to the amount (£37bn) given by UK government to RBS, HBOS and Lloyds TSB on Monday.

Hunger: Earlier this year, Jacques Diouf, head of the UN's food and agriculture organisation, said it would cost around $30bn a year to avert all future threats of conflicts over food. "How can we explain to people of good sense and good faith that it was not possible to find US$30 billion a year to enable 862 million hungry people to enjoy the most fundamental of human rights: the right to food and thus the right to life?" he said.

Greenpeace senior climate campaigner Jim Footner said: "This [bail out] money just shows how fast and how decisively the government can act when it faces a crisis. The onset of climate change is crisis of equal severity, and should tackled with a similar level of urgency and ambition. The scientists tell us we have less than 100 months before global emissions must peak and then begin to fall, and if we are to achieve this then we need massive investment in renewables and energy efficiency schemes and we must stop burning coal in conventional power plants. If we can find £50bn overnight for the bankers, then we can find the necessary finance and political will to lead ourselves out of the climate change crisis."