It is, then, conceivable that we could be in for a period in which a synchronised upswing in the global economy turns into a synchronised downturn, as weaker demand from the US ripples out to the export-driven economies of Asia and the Eurozone. Protectionism will then exacerbate the recession. To which the response might be: a good thing, too. If, as Al Gore was arguing during his visit to London last week, the world is on the brink of ecological catastrophe, we ought to lose our fixation with growth and concentrate on self-sufficiency and sustainability instead…..From this standpoint, anything that throws sand in the wheels of the globalisation juggernaut is welcome. What we need is a full-scale cathartic crisis that will enable a new and better world to emerge.
It might not be that easy. True, a collapse of the Doha round, and a sharp contraction in global growth, could provide two of the elements that brought about change in the mid-20th century. But in the 1930s, the progression of events did not go stock market crash, recession, new world order. It went stock market crash, financial collapse, beggar-my-neighbour devaluation, protectionism, fascism, world war, new world order.
Clearly, the solution to Gore’s looming environmental Armageddon has to be collective, rather than unilateral. There is no way that the US, for example, is going to take action to cut carbon emissions unless it is sure every other country is doing likewise.
Yet the chances of multilateral action will be diminished in a climate of fear generated by economic weakness. The report on the economics of climate change currently being undertaken by Nick Stern at the UK Treasury is likely to conclude that the costs associated with a reduction in the emissions to the levels deemed safe by scientists are relatively modest. Gore himself believes that tackling climate change will be good for business, opening up plenty of new opportunities to make money.
That’s as may be. Multilateralism is a delicate plant; it does not thrive in harsh climates and the same impulses that drive countries to put up trade barriers when times get tough will persuade policymakers to listen to the special interest groups arguing that the price of tackling climate change is too high. The growth-at-all-costs lobby will be strengthened.
Delayed, but there is a day of reckoning Larry Elliot in the Guardian, 26 June 2006.