Notwithstanding small but positive signs of recovery in the United States economy, next week's G20 summit in London comes at a particularly low ebb for most of the world's major economies. The International Monetary Fund has forecast that the global economy will contract by between 0.5 per cent and 1 per cent this year, the worst performance since World War II. Many countries, having reached the limit of their ability to ease monetary policy any further, now find they're having trouble selling necessary government bonds to finance their fiscal stimulus measures. The problems are most acute in the eurozone, with many of the smaller European nations now juggling large budget deficits. The IMF is tipping that the recession in Europe will be even deeper and longer than in the US. This week the Bank of England warned that Britain could not afford to undertake any more stimulus measures a message many other governments are likely to hear in the coming months. Even the hitherto unchallenged belief that government spending and other pump-priming measures are the best way to alleviate this crisis is being challenged, with embattled Czech Prime Minister and current holder of the EU presidency Mirek Topolanek damning such steps as ''the road to hell''. Unemployment is rising, most dramatically in China and the US, but also in those countries vulnerable to the social upheavals engendered by poverty and joblessness. Whispers of protectionism have added to fears that the crisis could swamp the more vulnerable underdeveloped countries.
Organising effective help for those poorer nations should be at the top of the agenda for this G20 meeting. G20 leaders have already been asked by the World Bank to increase aid commitments: the summit needs to ensure the IMF is given the resources and capability to quickly bail out any country that needs rescue.
Another way to guard against disaster striking the less-developed world is to secure a general agreement that no industrialised country will resort to protectionism, whether in trade or in jobs.
To his credit, Prime Minister Kevin Rudd has been one of those leaders most vocal about the dangers of a return to the beggar-thy-neighbour protectionist policies of the 1930s, though a World Bank study has found that 17 of the G20 countries have introduced protective measures of one kind or another since the last G20 meeting in November.
In Washington this week, Rudd also drew attention to the other great challenge facing the G20 leaders in London: that of building new global financial structures to ensure the proper oversight and regulation of markets so that, with luck, future crises can be avoided.
Only by dismantling the existing network of global financial agreements, some of which stretch back to World War II, will such reforms be possible. These difficult reforms will take months, if not years, to achieve but a solid start can be made at this meeting, provided US President Barack Obama provides strong leadership. With the US having triggered this crisis, there is an expectation that the Americans should lead the world out it.
Turn off the lights
Most Australians are aware of the threats posed by global warming, and generally supportive of the need for remedial action, whether it be meeting targets for reduced carbon emissions or making greater use of renewable energy sources. Relatively few, however, have taken individual action for example, by switching to solar hot water systems, taking up green-energy options offered by electricity retailers or installing energy-saving light globes in their homes. Take-up rates remain low because of the premiums charged for such products. Yet reducing our demand, and appetite, for electricity generated by burning fossil fuels the biggest single generator of carbon emissions is fundamental to alleviating global warming's impacts.
Earth Hour has expanded rapidly since its modest launch in Sydney two years ago. This evening at 8.30, people in nearly 2000 towns and cities around the world, including Canberra, will switch off their lights and minimise their power use for 60 minutes.
Critics will call it an act of hollow symbolism unlikely to reduce carbon dioxide emissions by anything other than a token amount. Such cynicism, combined with an unwillingness by individuals and governments to share the burdens and costs of responding to climate change, is one of the biggest obstacles to effective global action.
Though its actual impact on emissions might be difficult to quantify, Earth Hour does foster the belief that individual action is a necessary and useful first step in meeting the climate change challenge and letting governments know that they cannot sit on their hands any longer but must act. You can add weight to this message by switching off your lights between 8.30 and 9.30 tonight.
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