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Chris Huhne: It's green growth or nothing
It's green growth or nothing
We have no choice. High energy prices are here to stay and resource-frugality is our only hope for a sustainable future
Chris Huhne guardian.co.uk, Thursday 3 May 2012 15.00 EDT
Much of our economic debate implies we must choose between going green or going for growth. That view may be the opposite of the truth. There is now hard evidence that the real choice is between green growth or no growth at all.
For the first time in the postwar period, energy and other commodity prices are unusually high for this point of the global recovery. Normally the cost of basic materials falls in real terms for at least two years after a recovery begins. In the past, this boosted real incomes, supported spending and fuelled recovery.
No more. Today there is a different phenomenon in the developed world: the "squeezed middle". Far from boosting incomes and spending, high energy and material prices have undermined an already fragile recovery buffeted by financial crisis and the legacy of debt. The new pattern of high prices and squeezed incomes has enormous consequences for our future.
Since 1970, there have been four big global recessions. If we take the first three, energy prices in the two years after recovery began in the US were flat (on average, just 1%). In real terms, energy prices fell. By contrast, the rise since the global trough in 2008-9 has been a painful 63%. Nor is this just about energy. For commodities like food and minerals, price rises after those earlier recessions averaged 11%. This time it has been five times as big.
The phenomenon has lasted too long and has been on too big a scale to blame the hedge funds...
We have no choice. High energy prices are here to stay and resource-frugality is our only hope for a sustainable future
Chris Huhne guardian.co.uk, Thursday 3 May 2012 15.00 EDT
Much of our economic debate implies we must choose between going green or going for growth. That view may be the opposite of the truth. There is now hard evidence that the real choice is between green growth or no growth at all.
For the first time in the postwar period, energy and other commodity prices are unusually high for this point of the global recovery. Normally the cost of basic materials falls in real terms for at least two years after a recovery begins. In the past, this boosted real incomes, supported spending and fuelled recovery.
No more. Today there is a different phenomenon in the developed world: the "squeezed middle". Far from boosting incomes and spending, high energy and material prices have undermined an already fragile recovery buffeted by financial crisis and the legacy of debt. The new pattern of high prices and squeezed incomes has enormous consequences for our future.
Since 1970, there have been four big global recessions. If we take the first three, energy prices in the two years after recovery began in the US were flat (on average, just 1%). In real terms, energy prices fell. By contrast, the rise since the global trough in 2008-9 has been a painful 63%. Nor is this just about energy. For commodities like food and minerals, price rises after those earlier recessions averaged 11%. This time it has been five times as big.
The phenomenon has lasted too long and has been on too big a scale to blame the hedge funds...
http://www.guardian.co.uk/commentisfree/2012/may/03/green-growth-nothing
See also:
UK must go green to stimulate growth, says Chris Huhne
http://www.guardian.co.uk/environment/2012/may/03/uk-green-growth-chris-huhne
2 replies
= new reply since forum marked as read
= new reply since forum marked as read
Last edited Thu May 3, 2012, 07:49 PM - Edit history (1)
The bit about energy and food prices rising dramatically following the trough of the major recession in 2008-2009.
Here's the visual evidence:
Oil rebounded by 130% from April 2009 to April 2011, while food bounced up by 63% over the same period.
From the low point in the trough in February 2009 to April 2011, the rise was 180% for oil and 70% for food.
It's no wonder there hasn't been a recovery.
And oil and food prices are still tracking each other. Over the last 7 years, since we entered the Peak Oil plateau, they have correlated to 88.5%
