So You Want to Save the Environment? Try a Recession

In the last 25 years, annual US carbon emissions have decreased on only three occasions. Was the cause new climate legislation, an increase in the gasoline tax, or more stringent international treaties? Nope. Each decrease had the same cause: the US economy entered recession. This suggests that the only way the US can seriously reduce its carbon emissions—and help avert global climate catastrophe—is by entering a prolonged depression as worse than the Great Depression, at least according to the Energy Information Association.

Why is there such a strong link between the economy and the environment? One reason is jobs: people have to drive to them, especially in the US. People also have to have jobs to pay for gas. Thus, during a recession the amount of driving that we do goes down significantly.

Environmentalists often wonder why the US can’t be more like Europe. Europeans have higher gas taxes, stricter emissions limits, and a much more green-friendly vibe. One reason that people don’t talk about a whole lot: Americans are generally a whole lot richer, and the economy which makes us richer runs on carbon fuels. After adjusting for the cost of living, US GDP per person is 30% higher than in the UK or France—and over 50% higher than Spain and Italy (according to the International Monetary Fund). According to the EU, the country that did the best job of meeting its recent emissions goals was Estonia, which produced far less carbon that it was required. At the same time, Estonia experienced a decline in income of 20%, and an unemployment rate of over 17%.

The same pattern holds for countries much poorer than the US, too. One of the largest contributors to greenhouse gasses in over the last ten years has been China. While we can try to blame “dirty coal” and the problems of communism, the true culprit is the astonishing GDP growth that China has experienced: over the last decade, GDP per person in China has doubled–literally, doubled. To put that in perspective, Americans would have to earn $100,000 per person by 2022 to have the same growth rate. But, right along with the increased standard of living has come increased carbon emissions–leading to global warming that countries like China (and those even poorer) can ill afford (income growth according to the IMF).

So is the only solution to save the environment for people to be poorer and for the US to live forever in an economic recession? No! Teens driving less helps too, and bodes well for the future. According to the US Department of Transportation 50% of 16 year olds got their licenses when they turned 16, but in 2008 only 30% of 16 year olds were driving.

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However, given the severity of the state of the environment–and the evidence supporting a recession’s contribution to lessening carbon emissions–it seems like the only sure-fire way to stop emissions from growing is a prolonged global recession.

Category: Financial News

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