Financial meltdown puts global warming on the back burner

Financial meltdown puts global warming on the back burner

Washington: The financial crisis and a deepening economic downturn are threatening to delay efforts to deal with another pressing global crisis: climate change.

Hopes for action had been running high since both Republican John McCain and Democrat Barack Obama had pledged to make cutting US greenhouse gas emissions a top priority.

But environmentalists now fear that the next US president may be more focused on reviving a flatlining economy, and Congress could be wary of supporting any measures that might slow growth, or raise energy prices for consumers.

“The truth is there is a very large question mark hanging over the idea that Congress would take economywide action on global warming, with the economy in such (an) anaemic shape," said Frank O’Donnell, president of Clean Air Watch.

In the short term, a declining global economy could reduce the growth in greenhouse gas emissions as consumption of goods and energy usage drops. But world leaders warn it could also undermine efforts to find long-term solutions.

European Union leaders are discussing delaying planned emissions cuts in response to the financial crisis. United Nations (UN) officials worry that wealthier nations may cut back on commitments to help poorer countries invest in clean energy or adapt to the impacts of warming, which is seen as crucial in getting a global deal to reduce emissions.

“You can’t pick an empty pocket," Yvo de Boer, the UN’s top climate official, had said last week.

The scientific evidence of the need for action on climate change continues to mount. Last month, scientists had announced that man-made carbon dioxide emissions rose by 2.5% last year, four times faster than a decade ago and faster than the worst case modelling had predicted. The rise was fuelled by rapid growth in emissions from fast developing nations such as China and India.

UN climate scientists have said that global emissions must peak by 2015 and drop by at least 50% by 2050 to limit the temperature rise to 3.6 degrees Fahrenheit (minus 15.78 degrees Celsius), the threshold where some of the most extreme impacts could begin.

But growing consensus in the US that global warming is a serious threat has not been matched by a consensus over how to solve the problem. All of the proposed solutions would require broad changes in the economy and how Americans use energy, and all carry significant costs.

Neither presidential candidate has backed away from their pledges to tackle global warming. Both men appeared at former president Bill Clinton’s Global Initiative conference in New York last month to reiterate their commitments to cutting emissions. At last week’s presidential debate, both candidates had said investments in clean energy could help revive the economy.

“It can be an engine that drives us into the future the same way the computer was the engine for economic growth over the last couple of decades," Obama said.

But translating those pledges into legislation that can pass Congress could prove politically difficult.

Obama and McCain have both backed Bills to create a cap-and-trade system, which would cap emissions and allow major emitters such as power plants to trade credits to emit greenhouse gases. The plan mirrors the scheme approved by the California legislature and governor Arnold Schwarzenegger, which requires cuts in emissions to 1990 levels by 2020.

The goal of cap-and-trade plans is simple: Put a price tag on carbon dioxide and other gases to pressure industry to reduce the use of fossil fuels. By auctioning off credits, the government could raise hundreds of billions of dollars in revenues to support investments in renewable energy and other programmes.

But a Senate cap-and-trade Bill, was pulled from the floor last year before a final vote after most legislators raised concerns that it could slow economic growth, or raise energy costs.

Scott Segal, who lobbies on climate issues for power utilities, said the arguments could be even more powerful if the economy continues its decline.

“The prospects for rapid action on climate change have been slowed by the economy," Segal said. But he added that McCain or Obama could still achieve a breakthrough on climate change if they push a package that limits costs to the economy and guarantees that US businesses are not put at a disadvantage to competitors India and China.

In a sign of where the debate may be headed, two key House Democrats, energy and commerce committee chairman John Dingell and Rick Boucher, released a long-anticipated “discussion draft" of a new cap-and-trade Bill.

The Bill proposes less aggressive short-term cuts in emissions than this year’s Senate Bill—a 6% reduction from 2005 levels by 2020—but deeper cuts in later years to reach an 80% reduction by 2050.

Environmentalists are suspicious about parts of the Bill, including a provision to pre-empt efforts by California and other states from moving ahead with their own cap-and-trade systems, and to prevent the Environmental Protection Agency from using its existing authority under the Clean Air Act to regulate greenhouse gases.