Those who champion policies to limit greenhouse gas emissions are accustomed to fighting an uphill battle, particularly on the associated economic costs. But the global financial crisis steepens the grade. As governments and industry seek ways to cut costs, some worry that the first thing on the chopping block may be green efforts. "Both our attention and money now are focused on the immediate financial crisis and it seems likely that governments and corporations will reconsider their commitments for going green as cash flow slows and oil prices drop," contends Washington Post columnist Marcela Sanchez. David Roberts, a contributor to the environmental blog Grist.org, adds that "as long as going green is viewed as an expensive and vaguely altruistic undertaking, it will never be a top priority."
The signs of backsliding are easy to find. European lawmakers wavered on proposed commitments to cut greenhouse gases 20 percent below 1990 levels by 2020 after the crisis took hold, though - for now will to stick to originally planned targets (AP). In the United States, where political will on climate change has been uneven, traction could be lost on progress toward federal legislation aimed at curbing greenhouse gases. Advocates acknowledge that passing a U.S. bill that places a price on emitting carbon, while not impossible (Yale e360), is not likely to be a top agenda item until the economic picture clears.
Other policy experts debate the impact the financial crisis will have for any proposed U.S. cap-and-trade program, which would essentially create a new commodities market. As this CFR.org Backgrounder explains, most cap-and-trade systems place caps on industry emissions and then allows firms to buy and sell surplus emissions permits or offset credits from green projects via a carbon market. William Kovacs, at U.S. Chamber of Commerce, warns: "Anyone who thinks you can have a cap-and-trade system in which trillions of dollars of new securities will be traded is just not paying attention to what's happening on Wall Street." Meanwhile, prices in emerging carbon markets (Carbon Finance) globally have held up better than in other commodities markets, but financial analysts caution that these markets are too immature to provide a safe haven for investors (Reuters). Though sales of carbon emission offset credits--investment in green projects in lieu of direct emissions reductions--have been strong, some experts still express concern over the quality of oversight (WSJ) these projects receive.
The frozen credit market and plummeting oil prices, in particular, pose concerns to new investments in green technologies. The Wall Street Journal points out that the credit crunch has left green-energy projects struggling to find long-term funding. Falling oil prices also could lower enthusiasm (LAT) for investment in alternative-fuel vehicles. Greg Kats, a managing director of Good Energies, a clean energy investment firm, told the Washington Post: "Declining oil prices can give us an artificial and temporary sense that reducing oil consumption and energy consumption is an issue we can put off." This CFR.org Crisis Guide examines the challenges energy consumption presents for climate change.
Despite the recent credit crisis, some analysts still see green opportunities afoot. An October 2008 whitepaper from Deutsche Bank contends that despite the credit crisis, green investments still present a chance for governments to stimulate their economies (PDF). Kevin Conrad, UN special envoy on climate change for Papua New Guinea, says "we should be really looking at low-cost emission reductions that we can effect very quickly." NDN fellow Michael Moynihan argues lower energy prices may make it easier to put a price on carbon emissions (Huffington Post) in the United States. And New York Times columnist Thomas Friedman contends: "We can't afford a financial bailout that also isn't a green buildup" and suggests any new stimulus package from the U.S. Congress should be targeted at green investment.