Financial markets have been turbulent as of late with no end in sight. A sagging global economy could overwhelm America’s recovery efforts with toxic effects on key climate change and clean energy initiatives now underway.
The Federal Reserve’s recent decision to postpone an interest rate hike is but one reflection of their deep global concern. In a world of multiple, interrelated systems, a sneeze in one global system could cause pneumonia in another; ultimately triggering a perfect storm.
As the global economy worsens and bubbles start to burst, an over-fixation on economic recovery could relegate promising clean energy and climate change initiatives to a secondary status, or worse. The geopolitical blips on the radar screen are ominous. Consider this:
1.We’ve been warned
Global asset, credit and debt bubbles are on the cusp of bursting. My email “News Flash” warned of this last May (See: “Bubblemania is Contagious – Five Warning Signs”). The punctured commodity bubble has already demonstrated the economic fallout to nations exporting raw materials. Imagine the impact of multiple bubble bursts all at the same time. Bottom line: Bubbles always burst; it’s not about if, but when.
2. American limitations
America’s economy is strong compared to many others, but not strong enough to lift the world back into prosperity. In fact, the opposite could occur. China’s declining growth rate (See: “The Chinese Ripple Effect“), deep economic malaise in Europe, Japan, Russia, Brazil, OPEC nations and others, and a slowdown in global trade are taking a toll. Bottom line: Global economic headwinds will be difficult to overcome in the foreseeable future.
3. Low on ammo
In an effort to recover from the Great Recession of 2008 and stimulate growth, our Federal Reserve and central banks worldwide have “printed” money, devalued currencies, created an easy money environment and purchased debt (Quantitative Easing). In addition, governmental fiscal policies have piled on huge deficits and debt to stimulate growth. Bottom line: There is little left in the tank to fight off a new economic meltdown.
4.The political gong show
In this coming presidential election, jobs and a faltering economy will be signature issues. Quick-fixes, soundbites, and short term thinking will fill the air; some will dub climate change and clean energy initiatives as job killers, a “war on coal,” and an oppressive tax on the middle class. The Paris Conference in December to address climate change will elicit calls that America is capitulating to the U.N. (See: “COP – 21 Crunch Time”) Bottom line: A global economic downturn could threaten key energy and climate initiatives.
5. Crises messaging
Climate and clean energy advocates will be challenged to counter specious claims with compelling value-added reasons for their respective positions. Highlighting the new economic engines of growth and job opportunities that will open up is a good start. The ROI (return on investment) metric should be a key part of any presentations. Saving money, as an imperative for sustainable practices, will resonate more than saving polar bears. Selling the “sizzle” – positive outcomes, and not the “steak” – negative, arcane data – will be an essential part of reframing the message. Bottom line: Play to the heart but stay true to the cause.
What it all means
The global economic outlook is marginal and the tools to fight off a new recession depleted. As the economic downturn intensifies and the political rhetoric hypes-up, the short term focus on jobs and the economy could suck the oxygen out of productive climate change and clean energy initiatives. Be prepared to respond in a context that resonates with the general public and policymakers while staying true to the message.
— R. Michael Conley, Transition Voice