How much climate protection can we afford?

I read a headline rather similar to this in the German newspaper FAZ today. It’s a good article that refers to this letter of “Business Europe”, one of Europe’s most important industry conglomerates, to EU-Commission vice president and person responsible for the prestigious “European Green Deal” project, Frans Timmermans. The letter basically read: Climate protection measures are nonessential right now, so suspend them to help businesses cope with Covid-19.

Timmermans replied, arguing the opposite: Investing into the European Green Deal, including digital transitions and moving towards a circular economy are more essential than ever. Business Europe later clarified its position by emphasizing that they are not arguing against the Green Deal, but against the previously discussed deadlines, which they perceive as too tight.

The reason why I’m writing about this is because voices that argue both for and against environmental restrictions in favor of economic recovery are going to grow over the next few weeks, as the world emerges from Covid-19 – a possible second wave notwithstanding. The exchange of Business Europe with Timmermans is a nice microcosm of that.

What worries me about these arguments is that they are completely missing the point. Because the changes that a warming climate causes to our planet are clearly measurable, whether they are man-made (“anthropogenic”) or not. As a result, it really should not matter if your priority is the economy or the protection of the natural world, because both require largely the same measures.

For one, the things we do today to reduce our impact on the natural world also reduce our reliance on it. For example, working towards a circular economy means decreasing our vulnerability to massive, unpredictable shocks (“idiosyncratic shocks”), as we would depend less circumstances beyond our control.

I do not want to go into too much detail here (let me know if you want me to). But the point is, I am convinced that those arguing for protecting the climate and those arguing for protecting the economy are really on the same side. Instead, the real front line is between those who are for or against changing our current economy.

After all, many of today’s most profitable corporations may not remain all that profitable if things shift towards a circular economy, or if their bad effects on the environment (“negative externalities”) had to be accounted for in production costs.

Ultimately, I am convinced that the private sector in particular will be able to handle regulatory changes just fine. All that will happen is that new, disruptive, innovative solutions will emerge. Is that not both what we want, and what a capitalist market system is supposed to be best at?

To sum this up, I believe that the question is not how much, but how little climate protection we can afford. Because every dollar not spent on adequate measures today will cost us several times that in the future.

More importantly, though, I think there is no need to be afraid of change, especially now. Instead, we should see our current situation as an opportunity. The Covid-19 pandemic has demonstrated the weak points in our systems in spectacular manner. Instead of rebuilding things brick by brick, I say let’s get to work and build something better instead.