Econ turns climate

Notwithstanding, these studies mix the short- and the long-term implications of financial crises for the environment. For some, despite short-term reductions in emissions in crisis years, economic crises are typically not good for the environment. The main argument is that recessions, by making access to capital more difficult, negatively affect emissions reduction efforts through their discouraging effects on investments (including investments in low-carbon technologies) (Del Río and Labandeira 2009). Both governments and the private sector focus on the recovery and on adapting their respective budgets, are shifted away from climate policies. As a result, crises lead to postponement of environmental projects as surviving the crisis becomes the goal, rather than transitionary at that time to a “green” company or economy. Also, at a time of economic crisis, carbon lock-in is much more likely.6 Additionally, lower energy prices during crises, reduce the economic viability of cleaner technologies. Governments are likely to avoid burdening businesses with extra costs and regulation at a time when the economy is fragile and jobs may be at risk (Wooders and Runnals 2008). Such scenarios also assume a low political will to implement climate policy in the short term and a reduced incentive to participate in international agreements to tackle the issue in the longer term.