Dominic Lawson: A load of hot air in the face of recession

If unemployment suddenly goes up, the prevailing fear of the majority will not be whether the polar icecaps melt
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The Independent Online

It's at this time of year that those of us living in the Northern Hemisphere think wistfully of the warmth and sunshine of the Tropics. Bali would be nice, especially the Westin Resort Nusa Dua, which describes its manifold amenities as "sheer indulgence".

So I'm very happy for the three British government ministers who will each be enjoying three-room suites at the Nusa Dua for the next 11 days. They are being accompanied by more than 40 officials, who, I hope, have also found spacious accommodation. The swimming pools of Bali's best hotels might be a bit crowded, however: the British delegation is a tiny fraction of the 15,000 or so delegates, lobbyists and reporters who have flown into the paradisaical Indonesian island for the latest United Nations conference on climate change.

Before you get steamed up about all those air miles, rest assured that the British government will be paying oh all right, you will be paying to "offset" the CO2 emitted in transit. Yes, I know this can mean no more than paying an intermediary to bribe subsistence farmers in the developing world to remain in mud huts instead of building homes with electricity, but it helps us feel more virtuous, which is at least half the point of the whole circus.

Besides, the Bali conference is very important, or so we are told. It is meeting to agree a framework for a climate change treaty to replace the 1997 Kyoto Protocol. A framework, mind, not an actual replacement treaty: that would require a much bigger conference. This is just talks about talks. As a matter of brutal fact, Kyoto itself was of only symbolic importance: its effect, if adhered to by everyone, including the United States and assuming that man's effect on climate is as the International Panel on Climate Change says it is would be that the average global temperature which would have been reached in 2095 will instead be postponed until 2100. Well, what did you expect for only six trillion dollars?

Until now, it has been received opinion throughout the political establishments of Europe, if not the US, that carbon taxes or offsets amounting to six trillion dollars are a fair price to pay (by the public, that is) for the privilege of honouring our Kyoto commitments. That might well be about to change, and change dramatically. There is a distinct possibility of what has been described as a "financial meltdown" in the economies of the developed world, precipitated by the credit crunch in the US.

The former US Treasury Secretary, Larry Summers, said last week that "the odds favour a recession". At the same time, the International Monetary Fund issued a warning of an "economic perfect storm" caused by the rapid increase in oil prices and the credit crisis. It's true that a recession by which economists traditionally mean two or more quarters of shrinking gross domestic product is not inevitable. The Abu Dhabi investment authority last week pumped in $7.5bn to shore up ailing Citibank. There are many other "sovereign funds" which are awash with countless billions of cash and whose presiding finance ministers have no wish to sit back and let the US economy lead the world into a slump.

Yet it could well still happen and then the developed world's overriding political priority will not be climate change, prevention of. If there is a sharp rise in unemployment and it has been a long time in this country since anyone able-bodied who really wanted a job was unable to find one the overriding fear of the great majority will not be whether the polar icecaps might melt. Or, to put it in more human terms, the prevailing fear will not be whether our future grandchildren will enjoy beneficent meteorological conditions but whether we can pay our existing children's school fees.

That might seem a purely middle-class preoccupation, but it would be worse for those lower down the economic ladder. There has never been a recession in history which was not hardest on the worst off. This is partly because those who have done well in the past have layers of financial fat off which to live in hard times, before the pain cuts to the bone; it is also because those with the least-marketable skills which is to say, the least well educated are the most vulnerable as an economy starts to shrink.

The Prime Minister has already shown his colours by supporting the proposals for a third runway at Heathrow Airport, on the grounds that to do otherwise would put at risk future growth in the British economy. Does anyone believe that a recession would make politicians less rather than more likely to back such surefire job-creation schemes whatever they might think would be the long-term effect on the global climate?

Gordon Brown, admittedly, bears the scars from the disturbances of seven years ago, when he felt forced to reduce the impact of the fuel-price escalator, a tax specifically designed (or so it was claimed) to help Britain meet its Kyoto commitments. It was not just Brown who buckled, however. No party had been more committed to so-called environmental taxes than the Liberal Democrats. Yet at his party's conference that year, Charles Kennedy declared that "politicians must listen as well as lead" and called for fuel taxes to be capped for five years.

This, let us remember, was the consequence of a few hundred lorry drivers demonstrating to preserve the viability of their businesses although it helped that millions of motorists also resented the fact that the Government was taxing petrol and diesel at a rate in excess of 75 per cent.

Some "dark green" environmentalists argue that a recession in the developed world would be a good thing, since it would reduce carbon emissions in a way that action by Governments had failed to do. For example, the always interesting George Monbiot wrote a couple of months ago that "a recession in the rich nations might be the only hope we have of buying the time we need to prevent runaway climate change". He might soon have the opportunity to witness the recession he hoped for. The trouble is, however, that a "recession in the rich nations" would not be self-contained. America will in recession cut back dramatically on the products it imports on a stupendous scale from countries which can in no sense be described as "rich".

The political leaders of the countries which are meant to benefit most from "action on climate change" might say that they resent America's carbon emissions, but they will enjoy even less the consequences of another Great Depression if it comes to that. It's a thought which might cross the minds of some of the thousands of delegates in Bali, a shiver down the spine, chilling even in the warmest of climates.

d.lawson@independent.co.uk

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