Bail-out and Stimulus Package: Yes for Economic crisis, No for Climate crisis?
When markets collapsed and when most of the major banks around the world went kaput, the governments around the world rushed to bail out the market. Almost overnight stimulus packages got prepared, approved by cabinets, politburo, senates, and parliaments and even by executive order depending on the political governing system in the countries. Almost in military-like marching order, all the sermons on virtues of open market economy made a 180 degree turn around. The goals of zero trade-tariffs and the best practices of ‘leaving the markets to work upon themselves’ were found to be strategically misconceived. In near orchestrated style, the governments around the world condemned the indulgence in not regulating the markets enough and ordered the system to intervene, control and even take over and nationalize the businesses. The intellectuals in political economy commissioned research and studies on virtues of monitoring the markets and vices of ‘market based economies’ and ‘economic which can turn the world into a devastating place due to ‘economic terrorism.’
The speed of response is lightening; the amount of the packages are as impressive as speed: Read these figures and bailout and stimulus packages: USA: US $ 800 billion (7% of Gross Domestic Product -GDP) , Japan: US $ 720 Billion ( 14% of GDP) , China US $586 billion ( 20% of GDP), EU: US $ 300 billion (apart from individual EU member states e.g. France US $ 40 Billion)-3% of GDP – and the list goes on. With those packages enter the ‘new system’ -or is it old system but forgotten?-of regulated growth.
The same time when the unprecedented financial crisis arrived on the scene and when governments started bailing out banks, the unparalleled Climate Change crisis started emerging with awakening concerns. It was evident that consequences of Climate Change would be devastating. Governments commissioned the reports at their leisurely speed to find out how much it would cost to avert the crisis. Some even thought that we cannot avert it now, so why not find the cost of managing the crisis. The governments had earlier debated the ‘bail out’ package to come out of the climate crisis. There was realization that a crisis is now at the doorsteps, and the floods of impacts are sweeping the world. The most authentic report was by Lord Stern commissioned by the British Government. It proposes that one percent of global (GDP) per annum is required to be invested in order to avoid the worst effects of climate change, and that failure to do so could risk global GDP being up to twenty percent lower than it otherwise might be.