Worldwide financial meltdown and what it means for the environment…

The worldwide financial meltdown is expected to have a dampening effect on demand for energy and goods. As the wallets lighten up, people will go out less, spend less on travel and luxury… at least that’s what the sound economics tells us.

Earlier this July (2008), when the crude oil prices had started heading north and peaked around $147 per barrel, there was a wide hope in the clean energy lobby that, perhaps finally now, the world had a financial justification to vigorously pursue development of clean energy alternatives.

The energy shock has galvanized everyone into finding alternatives, more so from the renewable sources and perhaps at a cheaper price point.

However, the financial meltdown, according to International Science Panel, poses a grave threat to efforts to turn back greenhouse gas emissions -- but it doesn't have to be that way, says the head of the international science panel that has authoritatively outlined the challenge for government policymakers.

It's crucial that carbon dioxide emissions that are on the increase be sent in the other direction by 2015, so the way to go is to use the current economic troubles to launch a recharged effort to rein in climate change, led by the next U.S. president, said R.K. Pachauri, chairman of the Intergovernmental Panel on Climate Change. Read more about his comments here.

Ramesh Jaura – also talks about the same theme - Enter the global financial crisis - exit action on climate change? According to him, that lingering apprehension is not shared by Pamela Cox, the World Bank's vice-president for Latin America and the Caribbean.

Adam Stein – discusses the same issue. According to him – “Although it is very difficult to make predictions about the direction of the economy, it appears likely the current downturn will continue for some time. Which is bad for the climate, mainly because of the way that a weak economy interacts with the other items on the list. For example, slow growth saps the political will for dramatic action on climate change”.

A weak economy could at least temporarily bring fossil fuel prices down. We continue to believe that the long-term trend in fossil fuel prices is up, up, up, but, as mentioned, volatility will muddy the investment picture for clean energy.

Margaret Kriz – talks about how financial crisis is dimming the hope for U.S. Climate Legislation. “Environmentalists had been looking to a new president and a new Congress to pass legislation dealing with global warming next year. But with tough economic times looming, the passage of a sweeping climate change bill now appears far less likely”.

However, the jury is still out on this issue.

Clean and green technologies may end up a big winner in the current global financial crisis, say some investment professionals.

Billions of dollars in new investments have been made in clean/green tech such as renewable energy and energy efficiency in recent years. And, despite fears of a major recession in the U.S., nearly all investment professionals and institutions reported plans to introduce new investment opportunities before the end of 2009, according a new survey of the 500-member Social Investment Forum (SIF), an association for socially and environmentally responsible investment firms.

"In the last two years the growth in the green economy has been tremendous," said Jack Robinson, president of Winslow Management Company in Boston.

"But the huge win for the green economy is the U.S. bank bailout programme," Robinson, a green investment expert, told IPS.

It turns out the near collapse of the U.S. financial system has a silver lining for the long-cash-starved alternative energy sector.

Another reason for green investor optimism is the virtual certainty that the U.S. will have a carbon cap and trade system by 2010 at the latest.

"The new Congress will regulate carbon emissions. The costs of fossil fuel will finally begin to reflect the costs of climate change," said Adam Seitchik, lead portfolio manager of Green Century Balanced Fund, and chief investment officer of Trillium Asset Management, Boston.

"Despite the credit crisis, the fundamentals of clean energy are so strong, they will find financing," Steitchik said in an interview.

Companies producing solar products have seen their revenues grow 60 to 140 percent this year and expect to reach 45 to 200 percent in 2009. One company, SunPower Corp., will see 2 billion dollars in sales in 2009, he said.

Although solidly profitable, the stock prices for these companies have plummeted just like all the others on Wall St. However that means they are terrific investment opportunities even if their earnings decline due to slowing economies and the credit crisis, he said.

"As energy prices continue to fluctuate and the need to address climate change becomes ever more urgent, many investors want to blaze a trail for clean energy solutions that meet demand and respond to the impacts of climate change," said Lisa Woll, chief executive officer of the Washington, D.C.-based SIF.

But if every dark cloud has a silver lining there's one over here as well...albeit it looks like a green one.

Tighter purse strings could (and already is) forcing the world to save energy and look at alternative options to stretch the dollar. Bjorn Lomborg, Danish author of 'The Skeptical Environmentalist' echoes, "Hopefully the crisis will make us smarter in spending our money."

There could be a perceptible shift in investments towards energy efficiency. More low scale and down to earth projects may reap the benefits. Consultants McKinsey & Co. opine that emissions-cutting measures such as better building insulation, fuel efficiency in vehicles, more efficient lighting and air conditioning end up paying for themselves via lower energy bills. More optimistically, if a bad economy fuels a grassroots green movement then that itself would be a big shift towards greener attitudes.

Some are still on the path of continuous investments. Sven Teske, renewable energy director for environmental group Greenpeace, said investments still made sense. He said that the wind energy market totaled $37 billion in 2007 and added more than 19 gigawatts to the grid.

The U.N. Climate Panel has estimated the costs of slowing climate change at only 0.12 percent of world gross domestic product to 2030, with vast benefits in avoiding human suffering. That is small change but the world is feeling an instant economic pinch right now. Are we losing sight of the forest by looking at the trees? Hopefully not, otherwise the battle to save the planet could turn into a war...too late

Climate Change and civilizations…

In my previous post on the topic of global warming and its impact on planet’s climate, I had delved into the causes behind global warming and varying opinions of different authority figures. This time, I would like to trace the effects of climate change on the evolution of humanity.

I came across an interesting article by Dr Nachiketa Das – where he discusses the topic of climate change and its effect on river Ganges.

He is of the opinion – “Global warming, now in 2008, is real, and upon us. How will global warming affect the rivers in India; will they all dry up? Can the holy Ganges, the river that has shaped and sustained Indian civilization through the ages, who we Indians revere as the life-giving mother, run dry! Many climate experts and environmentalists, in the last ten years, have been making dire predictions of the Ganges becoming seasonal. Some doomsayers have even gone to the extent of boldly predicting the river to be ephemeral by the year 2035, which is barely a generation away! Is it really possible that the Ganges will run dry by 2035! Is this calamity an inevitability that should be accepted as fait accompli, or is there anything we, the people of India, collectively can do to save the holy Mother Ganges from extinction”.

The concerns are valid. The Ganges originates from Gangotri glacier, which is one of the largest valley glaciers located in western Himalayas. 30.2 km long and 0.5 to 2.5 km wide Gangotri lies recumbent at the altitudes between 4,120 and 7,000 m above sea level. The total area occupied by the glacier complex (in 2001) that feeds Ganges, is 260 square km, which contains 40 cubic km of ice (in 1999). During a 60 year period between 1936 and 1996, Gangotri has receded by as much as 1,147 m, 850 m of which happened during a 25 year period between 1971 and 1996. In a three year period between 1996 and 1999 Gangotri retreated by 76 m. When this result is contrasted with the 2,000 m retreat over the last 200 years, the significantly accelerated rate of retreat has become obvious.

Also, Global warming does not mean uniform amount of warming at each and every place on the globe. Although vast majority of the places on this earth will become hotter due to global warming, however strange it may seem, certain parts will in fact become cooler.

Why? Well, it has to with how the weather and heat transfer systems work on our planet. Unlike the frozen wastes of Mars or lead melting surface of Venus, our planet is blessed with a very complex, yet delicate ecosystem.

The Gulf Stream is a vast oceanic current that carries warm waters from the tropics to the temperate regions of northern Europe and North America. This ocean current originates in the Gulf of Mexico, flows past the east coast of the USA and Newfoundland in Canada, and then crosses the Atlantic Ocean. It then branches into two, with the northern stream moving to northern Europe. The Gulf Stream is about 80 to 150 km wide and a 1,000 m deep river of sea that transports 1.4 petawatts (1 petawatt is 1,000 million megawatts) of heat, which is equivalent to almost 100 times the current energy demand of the entire world. Around Cape Hatteras on the coast of North Carolina in the US, the Gulf Stream transports water at the rate of 80 million cubic meter per second, and is much bigger than any river system of the world; in fact the combined release of all the waters from all the rivers flowing into the Atlantic is only 0.6 million cubic meter per second.

The Gulf Stream has significant localized effects on the climate of the east coast of Florida and Massachusetts in the US; and the west coast of Britain, which is a good few degrees warmer than the east coast. The warming effect of the Gulf Stream is most dramatic in the western islands of Scotland, so much so that the small township of Plockton (latitude 57.33oN) that is located east of the Isle of Skye, has a mild climate that allows sub-tropical cabbage-palm-trees to grow. The local climate in Plockton in the absence of the Gulf Stream would be freezing cold as latitudinal it lies further north of Moscow (latitude 55.45oN) by almost two degrees.

Due to global warming, there is every possibility that the Gulf Stream may change course or it may lose its strength. In fact in November 2004, it completely stopped for full ten days, and there are reports saying that in the last 50 years (since 1957) its deep return flow has weakened by as much as 30%. Any change in the characteristics of the Gulf Stream, would cause significant localized cooling in Scandinavia and Britain. At a time of global warming, the western islands of Scotland will experience substantial cooling.

The effects on human population and civilization can be imagined.

This, however, is the not the first time that climate change has affected humanity on such a scale.

The river Sarasvati for example, is widely considered to have supported the Harappan culture. Movement and ultimate decline of the Harappan culture are often attributed to climate change and its ultimate effect on river Sarasvati. Some Rigvedic verses (6.61.2-13) indicate that the Sarasvati River originated in the hills or mountains (giri), where she "burst with her strong waves the ridges of the hills (giri)". It is a matter of interpretation whether this refers not merely to the Himalayan foothills like the present-day Sarasvati (Sarsuti) river. The Sarasvati is described as a river swollen (pinvamānā) by other rivers (sindhubhih). Another reference to the Sarasvati is in the geographical enumeration of the rivers in the late Rigvedic Nadistuti sukta (10.75.5, this verse enumerates all important rivers from the Ganges in the east up to the Indus in the west in a strict geographical order), as "Ganga, Yamuna, Sarasvati, Shutudri", the Sarasvati is placed between the Yamuna and the Sutlej, consistent with the Ghaggar identification. It is clear, therefore, that even if she has unmistakably lost much of her former prominence, Sarasvati remains characterized as a river goddess throughout the Rigveda, being the home river of the Puru and later on, the Kuru tribe.

While Sarasvati River might still be remembered, its influence on Indian history cannot be discounted. Nor can its decline be overlooked.

However, climate change need not always be so bad for human culture. After all, our present day humans ascended to our current position in evolutionary terms due to ending of an ICE AGE.

Sahara desert, the largest one on our planet, used to be a very lush and green place before the change in climate led to its present state and forced a lot of human tribes into the valley of the Nile, leading up to its fabulous civilization and myriad dynasties.

Sustenance played a crucial role in the founding of Egyptian civilization. The Nile is an unending source of sustenance. The Nile made the land surrounding it extremely fertile when it flooded or was inundated annually. The Egyptians were able to cultivate wheat and crops around the Nile, providing food for the general population. Also, the Nile’s water attracted game such as water buffalo; and after the Persians introduced them in the 7th century BC, camels. These animals could be killed for meat, or could be captured, tamed and used for ploughing — or in the camels' case, travelling. Water was vital to both people and livestock. The Nile was also a convenient and efficient way of transportation for people and goods. The Nile played a major role in politics and social life.

But at the end of the day, it was climate change which led to rise and fall of these civilizations….

So what are we worried about?

It’s just that we humans are much more numerous now and spread of more area of the planet than at any time in our history. So climate change this time, turns out to be very inconvenient indeed and because it might lead to decline of our current global civilization and ultimately bring misery to untold billions, that we are so concerned.

We humans seem to be standing too much in the way of nature to be left unscathed by the fury that will be unleashed by the current spell climate change, arguably induced by our actions only…