Governments Seek Green Solution To Credit Crunch

Posted on 27. Jan, 2009 by Ross in Asia, Europe, Government Policy, North America

As the world continues to slide into recession, many would have predicted that environmental initiatives would have been amongst the first for the governmental policy chop. As country after country has announced their plans to fight against the downward spiral, however, the green agenda seems to have been furthered by politicians looking to combine Keynesian economics with reaching environmental targets.

China announced a ten-point economic plan in November 2008 in which environmental projects and energy efficiency upgrades such as upgrading urban and rural power grids featured prominently. Following suit, President Obama’s recovery plan for the US centred around the creation of millions of ‘green-collar’ jobs by massive federal investment into environmental infrastructure projects and energy saving initiatives such as large-scale home insulation installation and renewable energy generation.

Its not just new environmental legislation which is reaping dividends in the current global economic downturn. Car sales across the world have dropped, resulting in numerous vehicle manufacturers to cut production, close assembly lines and lay off staff. France, by contrast, has managed to successfully buck this trend with less than a 1% drop in sales, largely due to legislation brought in by President Sarkozy in an effort to slash transport CO₂ emissions. In 2008 French consumers were financially rewarded or penalised based on the fuel efficiency of any new car they purchased, resulting in increased sales of small efficient vehicles such as Citroen’s C1 which saw a 39% jump in annual sales. As part of Sarkozy’s first financial stimulus package the French government has upped the ante, giving €1,000 discounts on fuel-efficient cars in exchange for scrapping 10 year old bangers - a measure expected by some to reduce the expected downturn in consumer demand by two-thirds this year. Others nations have taken note: President Obama has already declared war on America’s gas-guzzling motor vehicles.

In this new political and economic arena where environmental and energy-saving initiatives are seen as economy-stimulating instead of economy-burdening, more and more companies will realise the benefits of protecting their own bottom lines by investing in clean technologies and energy-efficiency measures such as those ofered by companies like Somar International. As well as simply cutting costs, measures such as installing more efficient lighting systems which turn themselves off when no-one is present is an obvious demonstration of corporate responsibility: an increasingly important factor to today’s more environmentally-aware consumers.