Skip to main content

Save the global economy, save the planet

By Paul Gilding, Special to CNN
  • Paul Gilding: End of cheap resources, climate change will spur sweeping economic changes
  • Infinite economic growth impossible, but we have been in denial, he writes
  • Pushing economy hard means crisis will be big, global and soon, Gilding writes
  • Gilding: We can meet the challenge in the same focused way we responded to WWII

Editor's note: Paul Gilding is the author of "The Great Disruption." He has served as CEO of a range of NGOs and companies, including Greenpeace International, Ecos Corporation and Easy Being Green. He tweets @paulgilding.

(CNN) -- For 50 years, environmentalists have argued we should save the planet for moral reasons, that there were more important things than money. But it will be the economic impact of climate change and resource limits that will motivate the sweeping changes necessary to avert catastrophe.

Leaders and experts are beginning to realize this. Chinese Environment Minister Zhou Shengxian recently said, "The depletion, deterioration and exhaustion of resources and the worsening ecological environment have become bottlenecks and grave impediments to (our) economic and social development."

If I had said that in the '90s, when I was the global head of Greenpeace, it would have been dismissed as doom and gloom extremism.

Even the previous heresy, that economic growth has limits, is on the table. Belief in infinite growth was always irrational, but it is the nature of denial to ignore hard evidence. Now denial is evaporating, even in the financial markets.

Influential fund manager Jeremy Grantham of GMO recently said: "The fact is that no compound growth is sustainable. If we maintain our desperate focus on growth, we will run out of everything and crash." Or as peak oil expert Richard Heinberg argues, we are moving beyond peak oil and into "peak everything" -- arable land, food supply and many other basic inputs to our economy, as argued in Grantham's analysis.

For now, we will still push economic growth as hard as we can, at whatever cost required. As a result, the crisis will be big, it will be soon and it will be economic, not environmental. The planet will take further bludgeoning, but the economy cannot. So we'll respond not because the environment is under greater threat, but because the emerging evidence in science and economics shows something more important to us is jeopardized -- economic growth.

One example is commodity prices. Despite the recession and anemic recovery, oil and food prices have approached record highs recently, driven by underlying, long-term trends that even a recession can't slow down. Grantham calls this "the most important economic event since the Industrial Revolution."

If serious growth returns, the resulting resource price surge, particularly oil, will soon kill it again. As a result, what we are facing is not a few bad years of slow growth, but a fundamental shift -- the end of cheap resources and an environment in a state of collapse. Even the normally cautious International Energy Agency is sounding the alarm, with talk of impact in a few years.

So when the crisis hits, will we respond or will we simply slide into collapse? Humans respond powerfully to crisis, whether it be in personal health, a natural disaster, a corporate crisis or a national threat. Previously immovable barriers to change quickly disappear.

In this case, the crisis will be global and will manifest as the end of economic growth, thereby striking at the very heart of our model of human progress. While that will make the task of ending denial harder, it also means what's at risk is quite simply everything we hold to be important. The last time this happened was World War II and our response to that is illustrative of both the denial and delay process and the likely form our response to this crisis will take.

The UK's response to Nazi Germany's Adolf Hitler and the U.S. mobilization after the Japanese attack on Pearl Harbor were extraordinary and powerful. When we look at such history, we tend to see the progress of events as inevitable, but they rarely are. Both those responses followed long years of denial and delay.

Many had argued that the threat wasn't that great, the response would be too expensive and the public wouldn't support it. Sound familiar? But when the response came, when the scale of the threat was finally accepted, our response was breathtaking. At Churchill told his country: "It is no use saying, 'We are doing our best.' You have got to succeed in doing what is necessary."

With denial gone, government officials knew what was necessary. They directed industry to support the war -- banning civilian auto production just four days after Pearl Harbor. They raised massive amounts of money to fund investment and technology research at an extraordinary scale -- indeed U.S. spending on the war rose from a 1.6% of GDP in 1940 to 37% just five years later. To achieve this, they curtailed personal consumption and drove remarkable behavior change to free up financial and other resources for the war effort.

Hard to imagine today? Then try to imagine the alternative -- that in a collapsing global economy and society we stand by and simply watch the slide. There is no precedent in modern history on which to base that conclusion and plenty of evidence for the alternative. Humanity may be slow, but we are not stupid.

The opinions in this commentary are solely those of Paul Gilding.