How the financial credit crunch could bankrupt the environment
Author Paul Donovan and Julie Hudson
Publisher Earthscan
ISBN 9781849714143
RRP 24.99
From Red to Green

The authors of From Red to Green ask a perfectly legitimate and very profound question: is the credit crunch good or bad for the environment? Mostly, the answer seems negative. In a whole series of tabled action points for food, water, energy and more besides, the necessary investment to achieve a more intelligent, less wasteful world, is absent — and in fact less likely because of an ailing economy.

Tantalizingly, of course, you could flip the problem on its head, so a restrained economy resulted in restrained consumption. The fields would breathe a sigh of relief and the birds sing a little louder.

But they are not singing louder. There is some evidence for a green crunch, such as reduced oil consumption resulting from reduced mileage by private motorists owing to the high cost of fuel, with or without taxation considerations. But the bigger picture shows that a weak economy makes it far harder to get us all using electric cars, which cost more.

An ongoing question alluded to throughout the book is where the best environmental bang can be had for the least buck. For instance, would it lie in very expensive electric cars made from super-carbon intensive manufacturing processes, or in public transport and a concerted effort to recreate an Oxbridge-style cycling culture in every city?

The authors want consumer durables to last longer and call for a repair-not-replace attitude. But they’re also perfectly aware of the enormous complexities behind these issues, wisely noting that the US ‘cash for clunkers’ scheme was not in itself bad, but certainly wasn’t optimal either, from an environmental perspective (p83). It had an environmental good in the form of enhanced fleet fuel economy — but it was massively wasteful.

This is a recurrent pattern throughout the book. Political initiatives in the face of any ‘crunch’ are short term and favour existing industries rather than progressive new ones. The result, even if it has a green tint, does not get us ahead in respect of solving the big problems.

Perhaps inevitably, the authors conclude that there is no grand map to show us the relationship between credit and environmental crunch. Consumption patterns change with downturns, but “the consequence of these changing consumption patterns are diverse in their environmental implications.” What we have is a lot of change, both financially and environmentally, “which is not necessarily complementary.”

Asked for their reflection since the book was published, Hudson says, "Sadly, many of our worst expectations have been met." She adds, however, that there “have been three surprises... from the perspective of sustainability. They are: weather volatility (bad), shale gas (good and bad), consumer interest in local food (good).”

On a slightly more positive note, Donavan adds, "The Great Recession that followed the financial credit crunch has proved to be as economically corrosive as we feared. However, unlike previous recessions awareness and discussion of the environmental credit crunch has not faded from the public consciousness."

Both authors are managing directors at Swiss bank UBS, and attended St Anne’s College. They’ve donated any proceeds from the book towards a green re-building of the college kitchens.