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Are recessions good for the enviroment?


There’s a lively rivalry boiling over at Treehugger.com. Lloyd Alter posted a tongue-in-cheek riff on how the economic slowdown could help the environment. Think about it: from goods like iPods to services such as air travel, less spending means less consumption, less energy use, less trash generated, and so on. Bring it on!

Not so quick, retorts Michael Graham Richard in a counter-point. Thinking a little deeper, Richard points our four reasons that a recession will hurt the green effort. For example, cash-strapped corporations (and governments) are likely to cut funding on green programs. Ditto, too, for anxious consumers who are likely to forsake costly organic products if money is tight.

Sadly, I lean to Richard’s more skeptical take. To his list I’d add a fifth example. A recession could send gas prices lower for a spell, a retreat which consumers yearn for deeply, no matter how temporary it proves to be. This could have lasting effects. A slight retreat in gas prices will attract more consumers to buy big vehicles than a proportional uptick in gas prices is likely to attract new hybrid sales. (Put another way, elasticity of demand for gas guzzlers is high as gas prices fall and low as it rises.) And since vehicles have a life span of a decade or so, such a backslide toward SUVs and trucks would hurt long term fuel savings goals.

What do you think?


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