By J.R. Pegg
Washington, DC (January 10, 2008)- Concern about environmental degradation is beginning to impact the global economy, according to a new report by an international environmental research group. The Worldwatch Institute details a lengthy and distressing list of environmental problems caused by the global economic system, but finds some evidence that the world is taking small steps toward a sustainable future.
The world’s leading corporations and investors are beginning to realize “the tremendous risks” that environmental degradation and climate change pose, Flavin explained, and starting to respond to growing demand for greener policies and technologies. The report estimates that more than $100 billion of annual investment is directly related to environmental concerns.
Some $52 billion was invested in renewable energy in 2006, according to figures in the report, a 33 percent rise from 2005. That figure seems to have jumped to $66 billion last year, Worldwatch says, and is set to rise again this year. The report also estimates carbon markets tripled in 2006 to some $30 billion.
The report notes that major corporations have taken significant steps to improve their environmental performance- largely because they have realized it is a way to save money. “Reducing wastes typically means reducing costs and companies are increasingly finding this out,” said Gary Gardner, one of the report’s lead authors. Gardner highlighted how chemical giant DuPont has cut its greenhouse gas emissions some 72 percent in the past 16 years and saved $3 billion in the process.
Clean technology is now the third largest recipient of venture capital, the report says, and new renewable energy laws and climate policies in China and Europe will “ensure these kinds of investments will continue to flow for many years to come.” Furthermore, a majority of the world’s largest banks have endorsed new sustainable investment principles and many have announced major investments to tackle environmental concerns, according to the report. Financial giant Citigroup pledged $50 billion last year to address climate change over the next decade, the report notes, and Goldman Sachs invested $1.5 billion in renewable energy technologies in 2006.
The 2008 State of the World report is Worldwatch’s 25th annual assessment of global environmental conditions. Although it offers an upbeat message about green innovation, much of the report presents a sobering and worrying assessment of the state of the world’s environment, highlighting how economic indicators currently fail to adequately consider environmental degradation. Nowhere is this more evident than climate change, the report’s authors note, citing former World Bank chief economist Lord Nicholas Stern’s comment that the impacts of rising greenhouse gases caused by human activities represent “the greatest and widest-ranging market failure ever seen.” In the “Stern Review,” a report issued in October 2006, Stern warned that unabated climate change will cause profound impacts to societies and ecosystems across the planet and could cost the world five to 20 percent of gross domestic product, GDP, annually.
A growing number of countries are beginning to consider and implement “green accounting programs,” but Worldwatch acknowledges that the influence of such programs is still limited. Charting course to a sustainable economy is a daunting task, Flavin told reporters, but one that humanity must embrace. “Whether this transition occurs rapidly enough to avoid a breakdown of the global economic system and the unravelling of political systems is,” he said, “the single largest challenge facing the world today.”
For the full article, visit Environmental News Service.