Page last updated at 11:44 GMT, Tuesday, 21 October 2008 12:44 UK

Low-carbon economy is not a luxury

Elliot Morley
Elliot Morley

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.

G8 leaders in Japan (Getty Images)
Does the G8 have the political will to make a low-carbon economy a reality?

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.

Investor watching screens showing share prices (Getty Images)
We need that same political will to tackle the economic slowdown to tackle the twin challenges of climate and energy security

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.

Mirrors (Getty Images)
We can use the clout of the world's biggest markets to drive innovation around the world

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.

Coal-fired power station
Blue sky thinking, not fossil fuel dependent polices, is needed

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

Do you agree with Elliot Morley? Does the current financial crisis offer a unique opportunity to decarbonise the global economy? Is a low-carbon economy an essential way to create long-term wealth and jobs? Or is it a luxurious extra that the world cannot afford in the current financial climate?

As managing director of one of the leading renewable energy training providers in the UK I cannot agree more with the comments made by Elliot Morley. By pushing forward with 'green' infrastructure projects throughout the world we can really make a difference for our and future generations. In the UK alone we need to install an additional 7 million homes with solar thermal to help us meet our 2020 renewables target, by taking this opportunity we can not only stimulate the economy but secure our future at the same time.
James Booth, Managing Director, PPL Training Ltd, York, UK

I think it's about we recognise that governments do not have the ability and industry the inclination to move towards either a 'green' or a 'low carbon' economy. It was once said that "where the people go, the leaders will follow" and perhaps governments can be instrumental in facilitating this process. The Economics of Ecosystems and Biodiversity (TEEB) review have just costed the annual losses due to disappearing forests as between $2 -5 trillion. (That's how much it costs to replace the services that the forests provide for free). Our present politico-economic system does not account for these costs, skewing the economics of 'green technologies' so that they are always going to be economically unfeasable. Projects rejected 5 years ago would be very feasable if compared to the recent high barrel price. If it hit that high once, it's likely to do so again.

The government needs to commit to enabling strategies that will allow the public to become self-sufficient as their budgets allow. Their present efforts don't do this and worse, actually hinder the process. eg. Fuel cells belong in homes NOT cars. Hydrogen is cheap and plentiful and can be sourced renewably. It is only expensive when compressed to the densities required for vehicles. Having a super insulated house (4 times better than present govt. 'eco'housing) is of little use without correct solar orientation. Underground Coal Gasification could release the 200+ years of energy provision available in the UK without releasing the pollutants that make coal "dirty". Our existing gas fired generators can easily be adjusted to run on 'syngas' rather than natural gas and phasing them out to be replaced by hydrogen fuel cells running on the same fuel would halve those carbon emissions by eliminating the Carnot cycle. There is enough existing technology and infrastructure to support a changeover with no loss of "lifestyle", but it does require a different worldview to what presently drives 'western civilisation'
peter , Surbiton UK

Usual self-serving claptrap from self-appointed experts anointed by BBC activists. Whatever happened to journalism?
Andrew Dibb, JHB South Africa

Yes! But, I'd go further to say that any time is a good time for environmentally responsible investment. It's only a shame that it's taken 20 years or more for our common future to become an important issue. We need our governments to take action now, both with public sector investment and with financial incentives for individuals and businesses.
Pete Howlett, Brighton, UK

I couldn't agree more.
Matt Dixon, Leicester

An excellent article that captures the flavour of the moment.

I would add to this that not only is the timing right for government and regulatory intervention, but for businesses to pick up the baton. It has long been a supposed truism of the advertising industry that downturns are clear opportunities to invest in brand, not reduce investment, ahead of the competition.

The difference with the whole climate change / low carbon agenda is that serious efforts that businesses make now will significantly reduce costs, reduce risks and offer up significant new revenue growth opportunities.

What better time than now for the corporate world to focus on putting its house in order?
Dean Stanton, Cambridge, United Kingdom

Thanks for the opportunity.

Carbon economy is an essential part in poverty alleviation,mainly in Africa.This is because much of Africa's natural green is being taken away by other developed nations.Also, because of insufficient know-how foreign tourists do come and do away with our green in the name of money.

If Africans are given the priority of education concerning global warming,then the mistakes of the first world will not be repeated.

I support thus the fact of carbon cut.As much of the expenditure for reducing carbon emission might be given to post and pre-war nations.

Franklin Bahfon , Buea/South West/Cameroon

Yes, I agree that we must create a low-carbon econony at once and that this will create jobs. The financial crisis arose because we were living beyond our means financially and the finance sector was building castles in the air. We are doing the same with the environment, living beyond the carrying capacity of the planet. We cannot afford to delay urgent action to remedy this, or the result will be far worse than any financial crisis.
Dilys Cluer, Scarborough

Mr Morley basis his viewpoint on a false hypothesis. That CO2 emissions will cause dangerous levels of global warming.

The hockey stick graph has been destroyed yet the BBC still present it as a fact. See McKitrrik and Mckintyre.

For a very good analysis of temperatures refer to Robert Carter's presentation on uTube.

For evidence of past warming at the arctic refer to Climate4 you.

The deniers in this debate are the vested interests like Mr Morley.

Wrap up warm its getting colder.
Stuart Harmon, London

I completely agree that this is an opportune moment in time. Green markets must be created by new environmentally sound, forward looking policy. The consumer demand will come from a reshaping of the industries necessary to comply with the new rules of engagement.
Greg B, Burlington Canada

We need to look beyond mere replacement of a few dirty coal and oil burning power stations, hence a few thoughts. 1. Build numerous nuclear power stations, up to near peak level. 2. Require All new builds to come equipped with solar power roofs, both for water and photovoltaic. 3. set up UK based factories to produce the photovoltaic panels we need. 4. Build numerous wind generating 'farms'. 5. Lok for more uses for electricity, using Tax incentives to promote electric powered vehicles, heating, etc. Lets use technology to beat the problem, rather than allow ourselves to be pushed back into the dark ages.

Global Warming can be beaten rather than surrendered to.
Barry P, Havant England

"The low-carbon economy is an integral part of economic recovery, not a luxurious extra, says Elliot Morley." I agree, at present the financial markets are built on expansion. However, the world is a finite resource that we as a species can not keep using without consequence. Now, is the ideal time to use the billions being poured into propping up the banking system as carrot and stick for more a sustainable economic model.
Keith, Newcastle

Dismissing a low carbon economy as a luxurious extra that the world currently can't afford is tantamount to saying that human life is a luxury...if this isn't urgently addressed, people are going to die (yes people like us not just the Third world poor). And we can help the economy as well as the environment. DEEDS NOT WORDS ASAP, as we yelled at the Houses of Parliament last week!
Liz Woods, Stansted, Essex, UK

I strongly agree with Elliot Morley. In Britain we face a growing balance-of-payments deficit on energy and, following the credit crunch, a likely contraction of overseas earnings from financial services. Investment in home-produced renewable energy will bring a big economic pay-off in helping us to live within our means.
John Medway, London, UK

I totally agree with this article.

It is about time we stop "worring" about the financial crisis itself, and start foccusing on the FUNDAMENTAL issue that lies behind it: the sustainabiliy of our ways of doing business and get going with our private lives.

If the economy is not sustained by real and feasible assets (eg. our actual economy pattern), such as environmental resources, sooner or later it is doomed to collapse anyway.
Felipe Barbirato, Brasil

The luxury that the world cannot afford is our present growth-orientated consumerist society. Classical economics cannot envisage a stable society which lives within its ecological means and recycles all materials, yet any thinking human being who looks at the photographs of Earth from space knows that we inhabit a rather fragile spaceship. The only real argument is how fast we move towards sustainability, and I'd say that, since this is a race we cannot afford to lose, the sooner we start and the faster we move the better.

Already, we are seeing huge suffering among the poorest of the world, yet it is the poorest who are least to blame for climate change. Are we really willing to create billions of martyrs to classical economic theory, just because it can't cope with a finite system? Change the definitions, boys! Human happiness can grow without a throwaway society - we know that. The Nobel Prize goes to the person who works out how to get from here to there!
Roger Wilson, Liverpool

Elliot is exactly right. The Low Carbon Economy is necessary, inevitable, but most of all highly desirable!

Elliot was (I feel) ousted from the parliamentary nest, for having these sane views. All renewable power to his elbow. He should join the Green party. And that's a compliment in my book. Caroline Lucas is the world leader we need right now.
Dave Hampton, Marlow, Bucks

Significant climate change seems like an inevitable event, while countries like the USA and China continue as they are. It is our countries responsibility to lead the way in alternative energy and green living so that when the inevitable change occurs we have the solution. This will give us both the economic and ethical high ground in the future. I completely agree with all of Elliot Morley's views, I just hope the Politian's listen.
Michael Aldridge, Glasgow

Why is this not on the news front page section on this site next to the headline 'gloomy forecasts for UK economy' or does the BBC think that a low carbon economy is a luxury to be tooked away further in?

The low carbon economy is the way forward however the free market economy is incredibly powerfull and has a missing factor in its grand plan. Economists do not take into account that growth happens in a finite world.
john, London

I totally agree tihw Ellion Morley. Yes, the current financila crisis offer a unique opportunity to decarbonise the global economy. Only low-barbon economy is an essential way to create long-term wealth and job. No, it is not a luxurious extra that world cannot afford in the current financial climate. It is chance to change our economic direction and make a good infrastrature for our next generation. Only now we can do it, otherwise, destoried livihood surrounding will cost more human being wealth to servive. It will more luxurious extra. We can not use money to buy destoried nature, but we can use money to pretect nature be destoried. Conpenhagen is our human being last chance to servive from global warming. Please whole world work together to tackle global warming. Righ help poor, whole world go low-carbon economy. Glaciers which our human being drink water original are melting away. If all the glaciers melt away, big water shortage will cause big conflict. Wars will hap!

pen. Wars will destory the wealth of our human being hard work built. Think about this, which one is cheaper? Prevent it in advance is cheaper or recover from huge destoryed nature by global warming by wars is cheaper? Please world leaders, citizens deeply think about these question, these situation. extinct animals will not back again, lossing glaciers will not back again, which can not be count by money. Save our nature, please go low-carbon economy!!!
Wang Suya, Osaka Japan

A low-carbon economy is the ONLY way that we as a species are going to survive this century. Continuing on our current path of fossil fuel dependency is ultimately an unsustainable one which will lead to catastrophe. It is a nineteenth century idea whose time is long past. We need real, forward thinking leaders in government and business who can bring the world (or the lagging behind US) into the twenty-first century. The only luxurious extras are the gas guzzling SUV's and energy-inefficient McMansions that unfortunately still predominate the american landscape.
Robert Horsman, Monument Beach usa

Because there is a temporary fall in oil prices there is a breathing space to allow the principles of a green eceonomy to be worked out and research to make them feasible to be finalised. Had oil prices continued to explode, economies would have collapsed before this could be done. Investment in the infrastructure to support this could take up some of the slack in the economy, so that as it recovers we start to have the DC power lines and high-speed trains to enable green power sources to hook up easily to the grid and people to switch from planes to trains.
Phil Darby, Plymouth UK

Not being a finacial expert the thought did occur to me, that if something did come out of the present crisis it would be the oppurtunity to change tack, to forego our lemming like desire for plastic junk and invest in our home, this wonderful and unique Earth
jane vraine, morienval france

No I do not think that the G8 leaders have the political will to make a low carbon economy work. They are mearly fiddling around the corners whilst the world burns!!

If they were serious they would not be fighting any wars, they would be finding other solutions for which I know there are plenty of!! And people like myself plus quite few others I know who have developed good feasible, economical and highly "green" ideas and in some cases, like mine, these ideas are carbon neutral to carbon negative would be well funded by now!! Alas we cannot find funding and I personally have been looking pretty hard for 4 years now (I have approached the ministries and various business organisations and other bodies)and all I ever hear is that we do not invest in agriculture (why, we all have too eat or do you all want to starve and agriculture is one of the worlds biggest polluters) or in that part of agriculture or you are too early stage to invest thus too high risk etc! etc! I ask "well where the hell am I going to get the 300 000.00 I need to get past early stage. That 300 000.00 will more than likely produce a machine to production level that could cut carbon emissions in agriculture by over 1billion tonnes per year and facilitate the sequestration of a further 1billion tonnes of carbon into the soil per year. I bet, if any, there are few who could match those figures, so why can I not find funding?!

Absolutely. If we play our cards right this financial crisis could be just the break with the past needed to start the green revolution. It's a chance for a win win win win win situation. Fewer greenhouse emissions, cleaner air, brand new dynamic industries and r&d, lowered dependence on imported oil, and technology transfer to other nations. We cannot afford not to take this chance.
John, London

Absolutely agree. In these trying times, with property and stockmarkets taking a dive, people are suffering through fuel poverty, and redundancies and business failures are occurring daily. We need to reduce our reliance on fossil fuels - to reduces CO2 emissions - but also to reduce prices by using alternative energy, growing food organically, and building communities rather than housing develpments, to reduce the need for personal transport and roads to destroy habitats throughout the world
Pam Lukeman, Cork, Ireland

He is right on the money! We need to embrace the change and transform our economies and culture toward sustainability.
concerned citizen, Ann Arbor, Michigan

Totally agree. We also need to move away from the throw away society. Nothing is repaired anymore. It's easier to buy new.

Mankind has to learn to live within its means. We can have a high standard of living without wasting energy and resources.
Kurt Kovach, Tamworth,Staffs

I absolutely agree, even with the carbon emissions trading element. I was very unsure about this and still think there is a danger of governments and industry using it as a game that allows them not to actually cut their emissions. However, the potential for countries like Brazil to empower their efforts to save the Rain Forest by giving it an economic value, is massive. It would allow other nations and trade areas to 'buy in' to keep the forest absorbing carbon, AND not releasing it while being destroyed. Green taxes don't have quite the sting they seem to at first if the overall environmental movement saves us cash rather than penalizes us.
Kath Perry, Brighton, UK

I hope Mr Morley will have a long chat with mr Obama. Of course he's right. I look forward to a time (hopefully not too far away) when the loudest noise on London's streets is the bicycle bell and pedestrians have to learn to look for vehicles rather than listen because electric cars don't make a lot of noise. I haven't had a car for two years now and won't buy one until someone makes a high performance-zero emision car at an affordable price. If I had a few million pounds I'd develop it myself and sell it to the world - especially the 'third' world.
Stephen Bulfield, London

I fully agree with the article. I expect if Obama becomes president the United States will also play a roll the steps toward a low carbon economy.
Geoff Kline, Corte Madera USA

I think it is about time there was a sufficiently large shake up in the financial world to trigger research and development in "green" issues.

If enough investment is made in this research we will have encouraging results in short order and once the investment makes it through to mainstream companies we will see a major drop in the cost to the consumer of these once expensive items (the relative cost of computers may be cited as an example) and once large take up is established, possibly be government grant aid in the first instance, then significant savings both of cash in the pocket and greenhouse gas emissions etc. may be made.

As for the large energy producers bemoaning their loss of revenue, then hopefully their sister companies will be making up for this by manufacturing the alternative technologies the world is crying out for, thus compensating the "fat cats" who own the holding companies for their losses.

There will always be a percentage of the community who does not see the need for change, preferring to buy their energy ready packaged, as it were: in these people the energy suppliers will find a market where they can sell their newly cost-reduced energy at the previous price, thus making significant extra profit from the nay-sayers (who, let's face it - deserve it!).

As for the large energy producers bemoaning their loss of revenue, then hopefully their sister companies will be making up for this by manufacturing the alternative technologies the world is crying out for, thus compensating the "fat cats" for their losses.

There will always be a percentage of the community who does not see the need for change, preferring to buy their energy ready packaged, as it were, for these people, the current energy suppliers will find a market where they can sell their newly cost-reduced energy at the previous price, thus making significant extra profit from the nay-sayers.
Alan Bradshaw, Wigan, England

Yes, yes, yes. At last someone acknowledging the real issue which needs tackled.
Naomi, Glasgow

I absolutely agree that co-ordinated global work on climate change could create not only a new impetus to improve our environment, it could be a massive 'gelling agent' to help create a more cohesive and co-operative global community. For too long we have allowed a deadly combination of vested interest and protective nationalistic finger wagging to shape our responses to innevitable change. What we really need now is for really big moves on individual issues - like getting China to produce enough LED lightbulbs to replace our dependancy on traditional and compact flourescent lightbulbs - indeed even if China alone decreed that all their domestic lighting should go over to LED as from today they would immediately have a world saving effect! The more we all work together on these issues, the safer the world will become - with the world working together rogue states will run out of the means to brainwash their supporters. Let's do it!
David Rose, Watford

Yet another "Carbon is the Great Satan" article.

Its as though there are no other problems on Earth that require attention. These Extreme-Green zealots can only think of their one obsession: Carbon.

Mr Morley's "anti-Carbon religion" does not get my vote.
Marty, Boston

We could invest in new energy efficient buildings now and help the building industry get back on their feet. This would be offset by not having to build as many power stations later, so we'd get some of this, in effect, for free. We could start by creating eco houses for all our troops (some of their housing was reported to be in a bad state earlier this year), then move onto sheltered accommodation and new council houses. Any vacated houses that are worth saving could then be made as energy efficient as possible before they get new tennants.

A high speed electric rail link to the North of England would go some way towards moving both passengers and freight to/from Europe (and past the London bottleneck), and at the same time we could install major optical fibre communications infrastructure, along the new rail route to allow businesses situated alongside the rail line to provide e-services at the highest speeds. The loading gauge of Euro trains is larger, so this means new bridges and tunnels would be needed, but if civil engineering infrastructure could reduce large numbers of long-distance lorries off our major roads (such as the M6) then we potentially wouldn't need to expand the motorway network (as is currently being proposed to the north west region). Just a thought.
Richard, Preston

A carbon market does not reduce emissions, it shifts them around and so can lessen the economic cost of making cuts. But it is pointless unless you have a tight system against leakage i.e. energy-intensive industries moving to jurisdictions less committed to carbon pricing, and I do not see a political consensus and commitment to a system against leakage.
Jim, London UK

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