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Global crunch reflects dual crisis: expert

Governments offer oil subsidies to offset downturn, increasing energy consumption

Global crunch reflects dual crisis: expert

The global economic crunch since last year also reflects, in a sense, a dual crisis of energy and the environment, a local economist said yesterday.
"Global expanding economic growth has pushed the use of natural resources to the limit, " said Daigee Shaw, president of the Chung-Hua Institution for Economic Research think tank.
The world is now facing worsening global warming, rising greenhouse gas emissions, poor energy efficiency and high industrial energy consumption in developing countries, Shaw said.
The cost of crude oil production has continued to rise, he went on, adding that after existing oilfields become exhausted, drillers have to move on and look for new fields at even higher prices.
Taking China and the United States as examples, he continued, the two economic superpowers are blessed with cheap oil. But, he noted, energy supplies have their limits. "Excessive economic and consumption expansion will eventually push the use of the Earth's natural resources to its limits," he said.
With the world mired in an economic quagmire, a global financial crisis has occurred, reflecting in credit constraints, dropping incomes, rising unemployment and stagnant consumption, Shaw said.
In efforts to stem the tide of the economic crunch, governments have begun to offer oil subsidies and subsidies for industrial production - moves that resulted in even greater energy consumption, he contended.
To avoid this dual environmental and energy crisis from being even further aggravated, Shaw suggested that governments should curb the trend by enacting stricter preventive laws, controlling market-driven consumption, coming up with new pricing policies, imposing carbon taxes and creating alternatives to fossil fuel.