The Economic Challenge of Climate Change

Bill Gates and the World Economic Forum

Bill Gates and the World Economic Forum

Government ministers and corporate executives descended on Davos, Switzerland, to meet at the World Economic Forum last week. While the world faces numerous challenges, ranging from the threat of an internet meltdown to the situation in the Middle East, the topic of climate change quickly took center stage. Delegates agreed that climate change posed a major threat to the global economy, with Coca-Cola’s Chief Environmental Officer, Jeff Seabright, noting that “Increased droughts, more unpredictable variability, 100-year floods every two years—we see those events as threats.” Seabright also noted that access to water, sugar cane, sugar beets, citrus juice and other key ingredients was also threatened by climate change.

But while the World Economic Forum is noting the importance of addressing climate change, individual governments appear unwilling to make significant strides towards real action. A report in the New York Times last week noted that the European Union is moving to ease climate rules in an effort to alleviate some of the economic pain associated with the global downturn. The United States has refused to sign most international climate change accords, usually citing the threat to the national economy as the reason. Economic growth and a clean environment as thus often cast as rivals in a tradeoff—to get more of one, you have to accept less of the other.

But is this accurate? Are environment and economy in constant competition? Al Gore, Bill Gates, and others are hoping not. In a conversation on climate change and development at this week’s World Economic Forum, Gates raised the connection between climate change and development, noting that, “As the poorest are being lifted up, as they’re getting lights and refrigerators, we are going to use more energy. There’s not a scenario here where we use less energy. We have to make the energy we use not emit any greenhouse gases, particularly CO2.” But Gore and others are hoping that “clean development” can create jobs and reduce carbon emissions around the world, removing the tension between economy and environment. If they’re right, the future looks a lot brighter. If not, there are some real challenges ahead.

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