News & Media Opinion Pieces Climate Change and the Financial Crisis; a new opportunity for DEA to redouble its effectiveness.

Climate Change and the Financial Crisis; a new opportunity for DEA to redouble its effectiveness.

by Dr Bill Castleden

Having completed my five year term as Chair of DEA I have been asked to write a ‘farewell’ piece for the website. It builds on an article David Shearman posted on 4 November 2008 and incorporates my thoughts on the recently circulated Hansen letter to the Obamas.

DEA exists because climate change, environmental degradation and pollution are such serious threats to human health. In particular climate change will bring to Australia an increased burden of heat stroke, injury from fire and storm, infectious diseases, social disruption and mental illness. In the developing world it will bring famine and water shortage.

In the heady rush of what Garnaut termed the ‘platinum age’ of human economic expansion DEA was having a hard time being heard. The economic masters of the turbocharged economies and their media were deaf to what we were trying to say, which was, quite simply:

“There is only one world; it is finite; it is precious; global resources have a limit; perpetual unsustainable growth is not possible. In excess of 6 billion tons a year of human-belched carbon dioxide going into the atmosphere every year is already excessively dangerous and yet humanity is intent on increasing this pollution year by year. Massive fiscal surpluses are being spent on personal tax cuts to increase consumption and to belch out even more carbon and very little is being spent on sustainable infrastructure or on caring for the health of future generations”.

Sadly, the times of plenty were clearly not the best times for trying to deliver a message about the environment.

And now, over the past few months, these times have changed. The world is embroiled in the worst financial crisis since 1929. The excesses of unregulated and leveraged capitalism are now bringing unemployment and financial difficulty to Western citizens. In less fortunate countries poverty and famine will worsen.

How can capitalism, on which we have thrived for so long, have failed us? Certainly governments became fixated on consumer-led non-stop growth in Gross Domestic Product. Without exception they measured their political success by its achievement and “maintaining consumer confidence” became government mantra. Markets were ‘freed-up’ and fuelled by excessive, even reckless, credit; pseudo-capital was created out of thin air. Regulation became a dirty word. Finally, derivatives, gearing and debt packaging were added to the mix. Ratings agencies and most economists cheered it on.

Suddenly the siren song of the self-regulation of the unfettered market has gone quiet.

For those of us concerned about it, the pre-crash economic system guaranteed environmental catastrophe; with global bio-capacity already over-exceeded and the atmosphere polluted with greenhouse gases, everyone was being exhorted to consume even more. Climate change from this atmospheric contamination was the greatest demonstration of the failure of an unregulated market in which polluters were not required to pay the price of their pollution. It was always going to be a race to see which imploded first, the unsustainability of the environment or of the market. The unsustainable market collapsed first.

So what on earth is good about this disaster?

1. Inevitably, as economies contract, the previous unchecked growth in global greenhouse gas emissions will abate; already it is clear that the dirty coal burning power stations of China are not working so hard to fill ships with consumables destined for the shopping malls of the West.

2. The financial crisis struck in the final stages of the US election campaign and ensured an Obama win. The Democrats will have the better chance of effective action on climate change and environmental issues.

3. The US is now more likely to co-operate with the rest of the world. It was insular to its own detriment, refusing to learn from others and viewing Europe as backward and socialist; an anachronistic attitude for much of Europe is probably 20 years ahead in attempting to deal with climate change and recognising its implications for health.

4. To prevent a prolonged global recession, such as that which followed the 1929 crash, governments and central banks are printing massive amounts of money. Some of this will be spent on infrastructure (although consumers will still be urged to keep consuming!). Much of this could, as Mr Rudd and President-elect Obama have said, be made available to spend on job-creating “green”, sustainable renewable energy construction.

5. China’s environmental attitude in these difficult times is increasingly positive. It appears that China will accept emission reduction targets if the developed countries will admit their causative role, acknowledge their huge carbon footprint and if they lead by promising significant reductions. The role for Mr. Rudd is clearly as arbiter between the US and China to establish the first steps.

6. As picked up by David Shearman, all of us, including the merchants of the financial debacle, now have the time and the opportunity to take a few deep breaths and to contemplate a new enlightenment. And many world leaders, businesses, organisations and individuals are expressing similar thoughts almost simultaneously, reminiscent of the multifocal blossoming of the seventeenth century Enlightenment.

7. Many more people are recognising the reality that economic and environmental sustainability have to go hand-in-hand. Humankind has to organize itself in such a way that the market is re-regulated to take notice of the “common good” and to better consider future generations.

8. As pointed out by James Hansen in his letter to the Obamas, many people are sick of fraudulent markets and of cowboy corporatism with its focus on short-term profit and feathering the nest of its executives. This was the economic climate in which the “cap and trade” market-driven policies for controlling greenhouse gases were generated. Perhaps, as Hansen has said, there is a case for re-arguing for an unambiguous carbon tax, 100% of which would be rebated to citizens?

All of the above provide a better opportunity for DEA to get its health message out to a now more alert audience seeking a better way forward. We have the knowledge and the health comprehension about the ill-effects of dangerous climate change, environmental degradation and of pollution at our finger tips. This is why DEA exists and this is why we are members. Our commonality as an organisation comes about because we are health professionals concerned for the future of humankind and our successors. This is our common voice. It is unique and recent economic events have, for the reasons I have outlined, given us a much better opportunity to be heard.

Although many of us manage our own small businesses, we are not economic experts of the pre-crash mould such as Garnaut and Stern, so our arguments about the exact mechanisms by which greenhouse gases will be abated will come from varied common sense perspectives. We are unlikely to have a unified view. Similarly, our prescriptions for curing the ills of latter-day capitalism and government failure will vacillate according to our political perspectives.

Because a healthy future depends so acutely on humankind reducing its carbon emissions as the world emerges from its current recession I expect we can all support with complete validity any potential solution that sustains this aim without necessarily agreeing an order of priority. Thus we can probably all support initiatives such as the following (very incomplete) wish-list:

1. A Renaissance Rudd and a Renaissance Turnbull who will lead on true sustainability and not to be captured by special interests.

2. An enlightened Australian government spending on green and sustainable infrastructure, on transmission lines for renewable solar, wind, geothermal and wave sources of energy.

3. Supporting research into better battery technology, into better means of harnessing truly renewable energy; into better public transport, into energy conservation.

4. Market incentives, such as generous feed-in tariffs for renewable energy which could release already-available capital by encouraging superannuation funds and savers to invest in renewable energy.

5. Spending to support a new car industry building clean, green electric cars to plug into sources of renewable electricity.

6. On curtailing support for bits of the global car industry that have left themselves exposed to market forces because of their own indifference to innovation, to reducing fuel consumption and to facing up to greenhouse gas emissions.

7. Renaissance corporatism widening its focus to embrace concern for workers, for families, for the environment and for the common good.

As a long-term student of and beneficiary from stock market investment I personally also support:

8. An enlightened market that focuses on sustainability; encouraging the investment of true capital (savings) into the development and production of goods of sustaining value that are always re-cycled.

9. A re-engineered market that rewards patient investment measured in months and years, not in weeks or days or hours.

10. A better-regulated market that removes derivatives (Buffet’s “weapons of mass destruction”) and short-selling which are in reality tools for speculators, day-traders, middle men and merchant operators devoid of true investment merit.

11. The better regulation of hedge funds.

12. The closure of tax havens, tax evasion and duty-free markets.

Of course there are obstacles to progress. “Dark Age” corporatism with its narrow self-serving focus on short-term profit and director remuneration survives. Gordon Gecko-like greed is entrenched and many individuals still tell government to get out of their lives so they can continue to do what they want. The acceptance of personal responsibility for climate change and environmental care is embryonic. A few parts of the Australian media seem also to be stuck in a pre-crash mindset, remaining highly reactive to change.

Despite these lingering negatives, I hope I have outlined the much stronger positives arising from our present economic predicament. DEA has a vital future and a crucial role to play in helping to usher in a more sustainable, environmentally-conscious and healthier way of life. I wish everyone well in their tasks, and miss our day-to-day interaction more than I can express. Thank you for the privilege of being your Chair for so long.