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Is the Crisis a Watershed Moment for Sustainability?

Jeffrey Sachs | RealClearWorld | March 2009

Both climate change and the increasingly perceptible scarcity of primary commodities are responsible for the current economic crisis. Endlessly rising energy and food prices have also played their role in destabilizing financial markets and eroding the spending power of national budgets. The goal of any form of crisis management should therefore be a unified infrastructure, through which the world can be better prepared in the long-term to counter the 21st Century crises of food scarcity and climate change. In the end, the crisis will only prove to be an opportunity if it induces a "rebound" to more sustainability.

In the short-term this entails massive infrastructure investments to prevent further dives in the market. In the long-term, however, such infrastructure that provides sustainable and efficient use of growingly scarce resources is most important, especially in developing countries. Otherwise, a world with 6.8 billion people - and steadily increasing - can simply not sustain economic growth in the long run. Electricity networks are needed, primarily ones which are supplied through renewable energies, as well as efficient irrigation and sewage systems, modern wastewater treatment plants, public transportation in and between cities, and nature reserves to ensure biodiversity and endangered species. Admittedly such investments in developing countries are much more likely to be put on the back burner in times of economic crisis. International credit is hardly available, and foreign direct investment is halting abruptly. The consequences for the political stability of these countries could be devastating.

As of today, nearly all continents are experiencing significant deficits in necessary infrastructure investment. Especially in times of crisis, these deficits can only be overcome through the concentrated and combined efforts of public and private actors. At the same time state actors must take the initiative to launch official partnerships with the private sector and eliminate any chance for corruption or cronyism. Rich industrialized nations must understand that developing countries are now more dependent on their aid than before. The G20 meeting in London is the ideal arena not only to discuss short-term stimuli packages, but also to seize the opportunity for change and to actively pursue the much needed rebound to sustainability.

This summary was prepared by the Atlantic Community editorial team from "Building a Sustainable World Economy," published here by RealClearWorld, March 2009.