A Green Economy: How much is Possible?
I recently took part in a “Riverside Chat” about global economic stimulus packages while sitting in a floating restaurant along the River Spree in Berlin with 12 other journalists from Chile, China, Estonia, Hong Kong, India, the Philippines, the United States and Vietnam.
We were there as part of a program sponsored by the Office of the Foreign Ministry to learn about the country’s perspective on climate change and protection, public policy, renewable energies and how Germany fits into the bigger picture with the European Union as a whole.
“When countries started introducing stimulus packages, in almost every country, I think, you have the criticism ‘it’s not green enough.’ And I was wondering what does that mean? Does it mean the greener the better? How would you say something is green or not green? And how green should it be?” asked Michael Kohlhaas, research associate for the Department of Energy, Transportation and Environment at the German Institute for Economic Research.
In this uncertain economic time, he pointed out, people don’t want to consume, they don’t want to invest, they just want to save because there is a lot of uncertainty. The stimulus packages, therefore, he pointed out, are there to help — they are supposed to make agencies in the economy spend money. But the agencies and consumers should spend the money now, not wait for the logistic measures to be taken and investing in and planning projects for 10 to 15 years and waiting for results before “real” investment opportunities can be seen: “that’s too late,” he said. “What the governments want, is that either consumers or firms start spending money soon, better this year than next year.”
Building more highways certainly is not green and friendly, he said, noting an article in The New York Times about what some state governments are doing with federal government funding.
“The U.S. government passed some money to the Texas government, and they pass it on to the cities,” Kohlhaas said. “And the city of Houston decided they’d rather build a nice highway through some ecologically valuable area with the effect that they will contribute to urban sprawl. So we have all these kinds of problems, so I think it’s worth looking into the details of what is being done, what have different countries done, and what is best practice to make sure that you get as green as possible and a sensible investment.”
However, what he failed to explain is that highways — especially in sprawling areas where mass transit such as subways and trains is not an easy option — are necessary for transportation to help ease the burden of traffic and congestion of these multi-million inhabitant cities. There also is a potential for some environmentally friendliness.
“You build a highway in Houston and move traffic more efficiently and that helps the environment; it does not hurt the environment,” said Martin Rosenberg, editor-in-chief of energybiz out of Kansas. “Secondly, you build a highway and run electrical plug-in hybrids on it instead of gas-consuming vehicles, you also help the environment, you don’t hurt the environment.”
Dr. Nils Meyer-Ohlendorf, senior fellow and coordinator of international governance at Ecologic Institute in Berlin, was on the two-person panel with Kohlhaas and discussed the pros, cons and meanings of stimulus packages and what it means to be “green.”
“Part of the solution of building a low-carbon community is money,” he said. “The International Energy Agency has estimated that we need about US$45 trillion until 2050 to build a low-carbon economy. The World Economic Forum estimates investment needs will be $515 billion per year to build a low-carbon economy…HSBC has calculated that we have about $430 billion available now for green investments.”
However, how do you calculate how ‘green’ a project should be and what constitutes green, he asked? “What is the green investment? …that is very difficult to produce.”
HSBC considers a wrecking bonus for cars to be a green investment, he noted.
“Well, you should know that anyone who buys a new car now while wrecking the old car gets 2,500 Euros, regardless of the environmental performance of the new car. So it’s quite courageous to believe that this is a green investment,” he said.
The hunt is still on to define ‘green’ in some circles and to determine a way to measure its environmental friendliness, especially from the economic standpoint that governments provide benefits for producing greener investments.
The panel was moderated by R. Andreas Kraemer, director of Ecologic.
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