The Green Boom - contributed by Kirk Serpes, originally appearing in Solar Action Bulletin
It’s safe to say that most people, myself included, were more than satisfied with the number of global crisis requiring our immediate and undivided attention. Most of us were more than happy just dealing with the climate, energy, food and political crisis, and would be too for quite some time into the future. But of course, Christmas came early this year with the collapse of the Wall Street and an economic crisis comparable of Great Depression. Of course, very few actually understand the problem and even fewer understand (in real detail) how it all happened.
In fact, to a lot of people the collapse of several large investment banks that add little if no value to this earth may seem like a good thing, but unfortunately it’s not that simple. The culprits were so skilled at mixing bad debt with good in the US financial system, that the economic chain reaction they started will have serious consequences for everyone on the planet.
The real fear is that as investors lose confidence in the markets they will switch to ‘safer’ options such as government issued treasury bonds and will do so in large numbers, meaning a drying up of funds to regular banks. This makes it harder and harder for banks to make loans to those who genuinely need it, thereby reducing the ability of businesses to grow. This will result in jobs cuts and reduced consumer spending, leading to more job cuts and an even greater reduction in spending. Of course, that will mean a reduction in exports to the US from pretty much every other country in the world, hurting the labour force all over the world.
The chances of that happening I feel personally are not that high, for two reasons. The first is that there is still a lot of money in the economy just looking for a good home and green technology is really in really the new black these days. Just as money moved to the property market when the dot-com bubble burst, funds are likely to move in green technology now. Not to say that living in a ‘boom and bust’ cycle is sustainable, especially since the ‘busts’ keeping getting worse, but its something to keep in mind nonetheless.
The second reason is that we did learn a lot of lessons from the last great depression on how to deal with an economic depression at its worst from a governmental perspective. Quite simply, at such time the best thing to do is for governments to start spending up large on projects that employ a lot of people, in effect keeping the economy in motion. Once again, money is likely to move towards ‘green’ projects like renewable energy, transport infrastructure like rail and so on. There is the rare opportunity to advance the development of infrastructure and technology, with long pay-back periods, that until now were uneconomical to pursue.
How much of this development is actually sustainable? Well that’s another question, the answer to which we might be able to influence. But for one thing, I am now more a lot more optimistic about our chances of solving our climate and energy challenges.