Europe as a role model in the climate issue
Jeffrey Sachs interviewed by Thomas Seifert
published in theWiener Zeitungon August 24, 2019 (translation below)
US economist Jeffrey Sachs puts his hope in Europe when it comes to solving the climate crisis. Sachs has been a regular guest at the European Forum Alpbach for several years. During the seminar week, he examined the state of the current global economy and analyzed the changing geopolitical landscape since the end of the Second World War. He also passionately discussed with the students the implications of the digital revolution and the role of the state in the market economy. The "Wiener Zeitung" spoke to Sachs at the Hotel Alpbacherhof.
The world economy is facing a phase of cooling off. What is your forecast?
Political risks are currently weighing on the global economy. Donald Trump causes a lot of uncertainty and controversy. I also expect a further increase in Trump's tensions with China. Moreover, there are indications that the cyclical recovery of the global economy is over and that a slowdown is very likely. We must expect stagnation or even the onset of a phase of contraction. The reason for the 2008 crash was above all the failure to settle the collapse of the investment bank Lehman Brothers. I do not currently see that. But there are other uncertainties that cause concern of similar shocks: The President of the United States is mentally unstable in my view and that alone is a profoundly dangerous shock to the international system. Add to that the trade dispute between the US and China. The current unrest in Hong Kong is also a factor. An explosion in the political situation in Hong Kong would have a huge impact on China and the world. Brexit is another potential source for major systemic shocks. And then there is the current conflict between India and Pakistan. You see, the list of things that can go wrong in the near future is quite long.
The most unpleasant shock for Europe is the Brexit, which threatens October 31st. What is the reason why US President Donald Trump supports Brexit?
That stems from Trump's deep aversion to Europe. Trump is a negative, naive nationalist. Anything that strengthens another part of the world, in his view, threatens US supremacy. Therefore, he sees a strong Europe as a negative. This, of course, is in complete contrast to the long-standing foreign policy of the United States. But that is irrelevant to Trump. For him, the world is full of enemies and antagonists. A strong Europe is an antagonist and not an ally. China is an antagonist, indeed an enemy, for him anyway. Of course, other things are involved in Brexit within the UK. Nostalgia, a longing for a bygone era of the mighty British Empire, plays a role in Britain itself. Of course, it is also interesting that there are no clear majorities - neither for Brexit nor for the positions of Donald Trump. 55 to 60 percent of Americans reject Trump's administration, and Boris Johnson has no majority behind him. A Brexit without a deal with the EU is rejected by a large majority of the British population. The consequences of a no-deal Brexit will certainly be grave for the UK, for Johnson and for the Tories.
What economic consequences do you expect in the case of a hard Brexit?
The next few years will be very difficult in such a case. The idea that Britain alone can do better in the world than if it remains a member of the EU is stupid. I am still hoping that Brexit will fail at the last moment.
On Friday there was also a demonstration in Alpbach about the climate crisis. What do you think of the climate protests?
The student protests are very much to be welcomed. The average global temperature has risen by about 1.1 degrees Celsius since the beginning of industrialization. Currently, we are dealing with a temperature increase of 0.2 to 0.3 degrees per decade. So on this trajectory we would face a temperature increase of more than 1.5 degrees by the middle of this century. That's an extraordinarily dangerous problem, but not everything is lost yet. The cost of wind and solar energy has fallen dramatically. In parts of the United States today even gas-fired power plants are being shut down, and not because the regulators want it, but purely for economic reasons, because they can't compete with wind and solar. Alternative technologies are becoming increasingly cost-effective, a sustainability investment program for the next 25 years would create jobs and make a massive contribution to economic recovery.
Is not it already too late for that?
Yes, it is late. But any further delay makes the risks even more unmanageable. Everything therefore speaks for immediate action. Europe should therefore do what the new Commission President Ursula von der Leyen promised in her speech: to present a European law in 100 days, which will result in a net zero greenhouse gas emissions into the atmosphere by 2050. Today, for the first time, there could be a European-wide plan, with investments behind it, and a path to achieving the vital goal of decarbonization by 2050. The next step: Europe should seek cooperation with China on this issue. This could happen as part of the Silk Road Initiative. For example, Europe could build a renewable Eurasian electricity network together with China, which could also include Africa in a further step.
Many - and not just notorious pessimists - are despairing of the challenges humanity faces: climate change, demographics and population growth, looming shortages of raw materials. So many risks, and toolittlehope.
Do not despair! We live in an era of tremendous technological advances. Today we have the technical possibilities to meet the crises you have listed. We know that the world energy system can do without carbon. And the costs of such an energy system are manageable and in the longer term renewables are cheaper than the previous energy sources. Above all, our problems are political. The problems are solvable. What is missing is the political will.
What to do?
Perhaps some of your readers are now surprised when I say that I look to Europe for the sake of problem solving. And it may well be that some Europeans will be skeptical: "But we are done!" But the fact is that Europe is the center of global sustainable development and a role model for the whole world. Donald Trump is a wakeup call to Europe: Act together and dare to take the leadership role of the world in sustainable development. Be united and lead. If you look at a world led by the likes of Donald Trump, Matteo Salvini, and Boris Johnson, then the picture indeed seems hopeless. But looking at the world through the lens of today's young people, progressive politicians, global cooperation, sustainable development, the Paris Agreement, new technologies, and the many opportunities for constructive partnerships in the world, then solutions to our great challenges look feasible.