In late September, the U.N.’s top climate official told Reuters that high energy prices remain an incentive for a new world climate deal to go through. But that may no longer be true. Just this week, America was caught in a financial storm that may end up costing taxpayers $700 billion.
Now, a new U.N. agreement to fight global climate change seems ambitious, because the financial turmoil in the U.S. may drain government interest in costly projects — such as geothermal technologies or offshore windmills — but may boost cheap green initiatives such as energy efficiency projects, Reuters reports.
Nick Mabey, director of the E3G think-tank, is also predicting a shift in investments as companies look for the quick returns and job creation that can come with energy efficiency initiatives.
Abyd Karmali, the global head of carbon emissions at Merrill Lynch in London, told the New York Times that financing for carbon-cutting projects is harder to find than before the crunch. But he says, “The carbon crunch is a multi-generational challenge that will significantly outlast the credit crunch.”
German Foreign Minister Frank-Walter Steinmeier told Reuters that the market difficulties would make it harder to agree on a climate deal. While Barack Obama, the Democratic presidential candidate, said last week that he may be forced to scale back his plan for energy investments.
In August, the World Bank said that the U.N.’s Clean Development Mechanism is “expensive and time consuming” because it requires project managers to follow new rules regarding emission reduction technologies.