Business Features

Climate, debt troubles two sides of a shrinking coin

By Georg Ismar Dec 9, 2011, 11:55 GMT

Durban, South Africa - Two summits in two different hemispheres are grappling with two burning problems, one of which could have serious consequences for the other.

Activists set the letters 'CO2' afire in front of German Chancellor Angela Merkel's office Thursday in Berlin, while their protest signs pleaded: 'Frau Merkel, save the climate, not just the banks.'

The climate crisis meets the debt crisis, as delegates in Durban ask the world to spend money for climate initiatives, just when the European Union in Brussels is telling its members to save.

A study by Ernst & Young found that by the end of 2012, the world financial crisis could lead to shortfalls of as much as 45 billion dollars in financing for climate initiatives. The Green Climate Fund, planned for 100 billion dollars by 2020 to help the most vulnerable countries deal with the effects of climate change, may be the first to feel the pinch.

'Germany could raise 100 billion euros within one year to rescue a bank,' says Regina Guenther of the World Wildlife Fund.

She wonders why it's so much harder to find climate funding.

German Environment Minister Norbert Roettgen told Der Spiegel that the two crises have common origins in a spend-today, pay-tomorrow mentality.

'The greatest crises of our time stem from a mindset and a political outlook that doesn't recognize a tomorrow,' he said. 'We run up financial debts, social debts, ecological debts. It all adds up to a life of debt, which ignores our responsibility for the future.'

In both cases, no matter who ran up the bill, whether fiscal or ecological, everyone will pay for it.

The eurozone's wealthy countries are writing checks to cover overdrafts by its spendthrift members. In Bangladesh, climate change caused by industrialized countries' decades of carbon emissions could eventually flood 35 million people out of their homes.

Bangladeshi Environment Minister Hasan Mahmud says in the end, everyone loses: 'We are all passengers on the Titanic. The difference, between the most vulnerable countries and the rest of the world, is we're the first in the water.'

The simultaneous UN climate talks in Durban and EU debt talks in Brussels underscore an inconvenient truth of climate protection: it costs money.

South African Energy Minister Dipuo Peters says a ban on incandescent light bulbs could save his country enough electricity to power 4 million households. But the higher costs of energy-efficient bulbs - and the emissions they reduce - are a hardship for the country's poor.

Canada, which is rapidly expanding its energy-intensive shale oil production, is planning to drop the Kyoto Protocol, currently the only binding international emissions reduction treaty.

China is the world's biggest total emitter, but on a per-capita basis its 1.3 billion people produce less greenhouse gas than the famously green Germans - one reason why Beijing is resisting binding rules it fears could dull its economy's competitive edge.

Climate activists and world leaders in Durban agree that the world needs to act decisively to keep global temperatures from rising beyond a maximum of 2 degrees by 2050. But who will pay for action?

In difficult times, Greek Environment Minister Giorgos Papakonstantinou in Durban underscored where national priorities lie: 'My country is in a recession. We Greeks need all of our resources to pay back our debts.'