NEW YORK (TheStreet) -- The United Nations Intergovernmental Panel on Climate Change's dire warning on Monday of the long-term impacts of manmade climate change is a reminder of a Churchillian maxim to "never let a good crisis go to waste." Crises, as it turns out, are one of the most effective ways of reducing carbon emissions.
Climate change and global warming emerged as mainstream topic in the 2000s amid a general economic boom in the U.S., Europe, Asia and emerging markets. In 2005, the European Union launched its oft-criticized emissions trading system. That same year The Kyoto Protocol, a U.N.-backed framework for binding carbon emissions reduction targets, came into force.
While carbon emission reduction goals came into prominence in a 1990s and 2000s economic boom, actual emission reductions only came with the worst global economic crisis since the Great Depression.
In 2009, carbon emissions actually fell. That ever-so slight reduction in the global economy's carbon footprint, however, came amid a cascade of corporate defaults, depression-like gross domestic product declines in developed economies and even larger GDP declines in nations like Singapore that are intertwined with global trade.
That should come as no surprise. During the crisis, industrial plants were furloughed, mining projects were abandoned, shipping tankers idled and leisure travel ground to a halt.
Overall, global carbon dioxide emissions fell a moderate 1.4% to 8.4 billion metric tons in 2009. As one might expect, emissions quickly surged when the crisis passed. Carbon emissions grew at one of the fastest rates on record in 2010, and they grew at 2.1% in 2013.
So was the emissions reducing global financial crisis of 2008 and 2009 wasted?
Not entirely, however, much more could have been done at the time to impact longer-term climate trends.
In the U.S., the $787 billion American Recovery and Reinvestment Act (ARRA), a program designed to stimulate economic growth, targeted renewable energy as one of its major initiatives. The Brookings Institute estimated in 2012, as the stimulus act wound down, that ARRA pumped $51 billion into green energy investment and committed the government to about $150 billion in stimulus and non-stimulus renewable energy investment.
That renewable energy investment was smaller than other tenants of ARRA such as tax cuts and relief provided to state and municipal governments, however, it did have a meaningful impact.
Through the Department of Energy, the ARRA provided a financing mechanism for renewable energy projects such as solar energy plants, wind power, ethanol and advanced biofuels, electric car rollouts and advancements in battery technologies.
ARRA's renewable investment and DoE-backed loans, of course, were widely criticized by the right. Presidential candidate Mitt Romney referred to loan recipients as "failures" and inferred that the government had wasted money.
In ARRA's wake, however, companies like Tesla (TSLA), SolarCity (SCTY), First Solar (FSLR), SunPower (SPWR) and -- here's the kicker -- Berkshire Hathaway (BRK.A) are becoming increasingly prominent corporate players in the fight against carbon emissions and man-made climate change.
Tesla, a Romney "failure," is anything but, having re-paid its DoE loans years before they were due. Other automotive giants like Ford (F) and Nissan used the financing mechanism, at the crisis apex, to invest in strongly performing electric car lines like the C-Max and Leaf.
First Solar and SunPower used ARRA and DoE loans to break ground on large plants that helped both companies transition away from the manufacture of solar wafers and into a more sustainable business model.
Berkshire Hathaway, through its MidAmerican Energy utilities division, has been among the most aggressive buyers of solar and wind energy projects launched under ARRA, with plans to bring them online in coming years. CEO Warren Buffett projected in his most recent letter to shareholders that the company's total renewable energy investment is on pace to hit $15 billion.
Berkshire will be the nation's leading generator of wind and solar energy when a handful of projects are completed in coming years.
The U.S. government and the Obama administration didn't let a good crisis go to waste, as Michael Grunwald's The New New Deal details. However, the size of investment by audacious businessmen like Warren Buffett, Elon Musk and corporations such as Google (GOOG) indicates that much more could have been done.
Economic crises present a paradox for environmentalists.
The prospect of falling emissions in a severe economic downturn in which ordinary workers may lose their jobs, homes and savings should not be celebrated. It is also hard to argue for industrial emissions caps or taxes during a time of economic distress, given that it might be perceived as undermining a recovery.
The most effective way to ensure that future economic crises don't go to waste in the fight against climate change is to focus economic stimulus spending on renewable energy projects.
Bottom Line: The ARRA is a model for how future stimulus programs should invest in renewable energy. Unfortunately, the 2009 stimulus program simply wasn't big enough.
-- Written by Antoine Gara in New York