Air Date: Week of March 18, 2005

Britain is issuing a warning when it comes to global warming. The United Kingdom is hosting the international Group of Eight summit this summer, and plans to become the next world leader in the new energy market. Host Steve Curwood talks with Economist magazine's Vijay Viatheeswaran about Britain's once and future role.

Transcript

CURWOOD: It's Living on Earth. I'm Steve Curwood.

A conventional wisdom in Washington these days holds that taking steps to curb greenhouse gas emissions is akin to putting a ball and chain around the leg of the economy. But, British Finance Minister Gordon Brown turned that logic around in a very public forum that included James Connaughton, who heads President Bush's Council on Environmental Quality. In a speech to environment and energy officials from 20 nations, Chancellor Brown claimed that global warming itself, could put a drag on the world economy.

Joining me is Vijay Vaitheeswaran, global environment and energy correspondent for The Economist magazine.

Vijay, Chancellor Brown's comments were part of preparations for the Group of Eight Summit of the world's major industrial nations that Britain is hosting this July. Did we just hear a preview?

VAITHEESWARAN: Exactly. This is an interesting gathering, actually. Britain has decided that it's going to promote the cause of climate change and doing something serious about it as its top priority this year and set up a whole year of events trying to get global consensus to bring America back into the fold on climate change. But, also, to try to do something more interesting on the economic front. And, that's where Gordon Brown comes in the picture. Gordon Brown, of course, is the finance minister. He is the money man in Britain and not usually involved in things that are green. And yet, he was the guy who was hosting the environment ministers and energy ministers. And, the message that the Brits want to send is it's about time that we stop putting the environment in the ghetto of politics. By putting such a high profile, important person as Gordon Brown at the heart of this conference, they were sending a message that climate is moving up in the ranks in terms of priorities.

CURWOOD: In a speech to this gathering, Finance Minister Gordon Brown said that human induced climate change threatens future economic activity and growth around the world. Vijay, what does he mean? How could global warming trip up the global economy?

VAITHEESWARAN: There are few ways that global warming could influence the global economy and not for the better, by and large. We already know that when temperatures rise we're going to have dramatic impacts in certain parts of the world on weather systems. Places that are prone to draughts might see very severe droughts. Other places might see very freakish and much more intense monsoons, for example. Neither of those things would be good for agriculture. There's already reason to think that we might see much higher waves and storm intensity and that might not be very good for shipping or for cities that have a very big port economy like parts of Los Angeles, New Orleans, Galveston, Texas. So, there are a number of ways in which we're going to see ecosystem effects, weather effects that pass through into negative climate effects and, ultimately, economic effects.

CURWOOD: In the U.S., the Bush administration has said that efforts to curb greenhouse gases, any mandatory efforts, are bad for business. Now, we have a high-ranking British finance official saying just the opposite is true. Who's right?

VAITHEESWARAN: History shows that we can tackle environmental problems while growing the economy successfully. So, I would say that the British finance minister is closer to being right. If you look, for example, at the acid rain problem which a decade ago was the biggest environmental problem in America; it wasn't global warming. The industry said there's no way we can tackle it; the coal plants in America will go bust. In fact, America found a very innovative approach called emissions trading. And through this way, we've solved the problem of acid rain in America. The utility sector hasn't gone bust and the American economy has boomed during the 1990s.

CURWOOD: The British finance minister actually went further in his speech and said that "a well-designed environmental policy can spur economic growth rather than hinder it." What do you suppose he means by that?

VAITHEESWARAN: Britain has a very ambitious vision for being the center of the clean energy revolution. Because Britain is the financial capital of Europe, they see the opportunity to be the venture capital, the carbon finance capital for the new global economy called Glo-Carbon. And, this is exactly what's beginning to happen. They're seeing a lot of opportunities, a lot of jobs, a lot of money. A lot of technology is coming up in Britain because it has a foot in the door in American-style capitalism, that is Anglo-Saxon capitalism as it's called, but they also have a foot in the world of European environmentalism. And, they see themselves as the perfect bridge to help bring the world toward this kind of innovative, new green, low-carbon economy.

CURWOOD: Sounds like they are going to be eating the lunch of American finance and energy development.

VAITHEESWARAN: As the global warming problem takes off, I think you're going to see Europeans, and particularly Britain, very well-positioned to capitalize on this. And, that's part of the reason why a lot of companies in America, Fortune 500 companies, are pressing the Bush administration for some action on climate change. They want to get in on this, as well.

CURWOOD: Vijay Vaitheeswaran is a reporter for The Economist magazine. He is also the author of a new book, "Power to the People." Hey, thanks for taking this time with me today, Vijay.

VAITHEESWARAN: It's a pleasure.