Why is climate change like the financial crisis?

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If the job of journalism is to analyse as well as report, it's surprising that so few connections have been made between two of the biggest stories of our time - the financial crisis and climate change. 

In an updated edition of his book Hot, Flat and Crowded, the New York Times columnist Thomas L. Friedman has rewritten the first few chapters to do just that. 

Friedman argues that the crises of the environment and the financial system are linked by politics and culture that lead to long-term damage by, as he puts it, "privatising gains and socialising losses".

"When you look at them side by side," he writes, "the parallels between what has been happening in the Market and what is happening in Mother Nature are eerie ... In both realms industries that benefitted from the underpricing of risks - whether they are credit-default swaps or carbon emissions - quietly lobbied the political authorities to keep loosening regulations so they could continue to reap large private gains at the expense of the greater public good."  

He quotes the climate physicist Joseph Romm, who describes reckless exploitation of natural resources as a "Ponzi scheme", in that "we have not generated real wealth ... real wealth is something you can pass on in a way that others can enjoy."

The probability of disaster in the environment far exceeds the percentage risks that brought the financial system to near collapse: as Friedman points out, "Mother Nature doesn't do bailouts." 

It's an appropriately sobering read for New Year's Day, but Hot, Flat and Crowded is not entirely a pessimistic book: Friedman calls for a renewal of purpose by a group he dubs the "re-generation", to make the creation of a sustainable economy as much a national goal in the States as the fights against fascism and communism that gave purpose, and elicited sacrifice, from previous generations.

The new edition of the book was published in November. Would Friedman have been as upbeat if he'd rewritten it after Copenhagen? Well, his views on that are in his New York Times column.

He says we shouldn't be surprised that legally enforced emissions and massive cash transfers to developing countries weren't agreed. Instead, he would like to hear a call from President Obama to compete in green industries: 

"In the cold war, we had the space race: who could be the first to put a man on the moon. Only two countries competed, and there could be only one winner. Today, we need the Earth Race: who can be the first to invent the most clean technologies so men and women can live safely here on Earth.

Maybe the best thing President Obama could have done here in Copenhagen was to make clear that America intends to win that race. All he needed to do in his speech was to look China's prime minister in the eye and say: 'I am going to get our Senate to pass an energy bill with a price on carbon so we can clean your clock in clean-tech. This is my moon shot. Game on.'

... If you start the conversation with 'climate' you might get half of America to sign up for action. If you start the conversation with giving birth to a 'whole new industry' - one that will make us more energy independent, prosperous, secure, innovative, respected and able to out-green China in the next great global industry - you get the country."

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