Germany's Crisis Response
In terms of originality, Germany's crisis response package beats everyone else to date. One item is giving 2,500 euros to anyone who is willing to scrap any car that is 9-years old (or more) and buy a new one. This is both good for the economy and for the environment. Another item - my favorite - is reducing the payroll tax. The whole program, worth 50 billion euro, is described in this article from the BBC.
I spent some time trying to figure out whether the Germans have gone protectionist, and whether the subsidy only applies to German-made cars. The answer is 'No'. Any make will do. Perhaps implicitly the government knows no German would be caught buying a Renault. Germans like their cars to be of good quality.
A similar plan probably wouldn't work in the US to save the Big 3. It may increase sales for their rivals instead.
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Germany is the biggest exporter in the world. If they start a protectionist movement, they will suffer the most.
Posted by: Georgi Angelov | Jan 14, 2009 5:55:39 AM
The global financial crisis, in addition to its negative effects, can also have some positive impact on the environment worldwide. According to the fact, that the manufacturing and industrial growth shrinks, there will be reduction in CO2 emissions, which stops the enlargement of ozone layer, slowly leading to a decrease of the global warming effect.
Negative effects include expected significant increase in deforestation, overgrazing, soil depletion, erosion, etc. due to the fact that unemployment rate increases, subsequently, people will try to find other ways to satisfy their primary needs and will probably shift to rural activities.
Government should invest in energy efficient technologies: It should finance the difference between energy efficient and ordinary technology prices to make it competitive. The thinking behind such logic is that energy efficiency, for example, in the district heat generation alone can annually save up to 80 billion cubic meters of gas, 350 million tons of carbon dioxide emissions per year on a global scale.
Posted by: GROUP 4 | Jan 26, 2009 10:10:26 AM
Group 5
Affect of the global crisis on the environment
We suppose that the crisis will have a positive affect on the environment. The main environmental problem nowadays is air and water pollution. The first is due to excess CO2 emissions, the main sources of which are:
1. Cars
2. Factories
3. Other types of transport (ships, airplanes, trains, etc.)
4. Electricity generation.
Despite the sharp decline of the price of oil and gas, the consumption of these products has fallen sharply in all the above-listed spheres and is likely to continue to fall. The less these products will be consumed the less will be the pollution. The claim that because of the smaller price the consumption may increase does not seem to be very credible, as the demand is decreasing much more dramatically. In addition, the prices are decreasing compared only to the brief peak of $147 per barrel in the summer of 2008, and in fact are just returning to the level of the previous years, while the overall economic situation is much worse now compared to those same years.
At the height of the crisis all the players – individuals, enterprises, states – will try to utilize the most energy efficient solution available, though will probably not be able to employ new ones or invest in research.
These, however, are unlikely to bring much relief to the problem of global warming. The process has already gained significant momentum and a relatively brief decrease of emissions does not seem to be capable of reversing it.
The crisis has already contributed to a decline in timber consumption, among other commodities. This will slow down the extermination of forests - vital rainforests among them.
The prices and the demand for food have also somewhat decreased. This will lead to usage of less fertilizers and will slow down soil erosion and deforestation.
We can conclude that the global crisis will have a positive overall impact on the environment.
Posted by: Group 5 | Jan 26, 2009 3:01:58 PM