The Australian
By: Siobhain Ryan
The slowing world economy could help to cut back global emissions as factories close and car fleets stall, in a rare piece of good news amid the financial doom and gloom.
The world financial crisis has prompted fears that plans to reduce carbon emissions could be postponed, delaying the battle against global warming.
But CO2 emissions are expected to fall because of the looming global recession, with Deutsche Bank last week forecasting Europe's industrial CO2 emissions would fall by about 100 million tonnes next year compared with last year.
Tim Hanlin, managing director of the Australian Climate Exchange, which operates a joint-venture trading platform for carbon offsets and abatement credits, said economic cycles were linked to emission trajectories.
"Generally speaking if you have less economic activity, you're going to have lower emissions,'' Mr Hanlin said.
In Australia, the most recent recession helped to put a lid on national emissions for many years, he noted.
And in the former Soviet Union, emissions hit a wall at the same time as the economy halted, following the nation's political disintegration in the 1990s.
"As a result, they're significantly inside their Kyoto cap, which is based on their 1990s emissions,'' Mr Hanlin said.
"Russia has a lot of excess allowance because of the recessionary effect of the break-up of the Soviet Union.''
Centre for International Economics executive director David Pearce said greenhouse emissions over the short term were roughly related to gross domestic product, depending on what was driving economic growth.
With a downturn, there would be less CO2 added to the atmosphere, he said.
But history had a way of smoothing out the cycles, Mr Pearce said.
"In the overall trend of emissions over the next 50 or 60 years, it would only be a small blip,'' the analyst said.
"It certainly would not achieve any of the greenhouse targets. At the same time, when economies are slowing, it also makes it harder to make any other greenhouse abatement efforts.''
The global credit crunch has seriously shaken economic confidence, and has undermined the political will to push forward with emissions cuts that could increase prices or cost jobs.
The European Union, which has championed larger cuts than the US or Australia, saw sharp divisions emerge last week over its climate change program before a consensus was reached.
A growing number of member nations wanted to make short-term economic growth a priority over the long-term threat of global warming.
Mr Hanlin said he feared the same could happen in Australia, although the Business Council of Australia has called for the Rudd Government to stick to its 2010 start date for an emissions-trading scheme, rather than introduce more uncertainty.
As Kevin Rudd is yet to set a 2020 target for greenhouse gas cuts, he faces intense lobbying to release a figure at the low end of his adviser Ross Garnaut's proposed range of 5 to 10 per cent.
A spokeswoman for Climate Change Minister Penny Wong said future emissions projections would take account of any changes in GDP growth forecasts, but offered no comment on whether this would influence the target-setting process.