While knowledge of climate change firmed up between the 1970s and the 1990s, large changes were also underway in the global economy. In the 1970s, the world economy experienced a series of crises. Since the end of the Second World War the world economy had been governed by what academics and policymakers call the 'Bretton Woods system': the World Bank, International Monetary Fund (IMF), and the General Agreement on Tariffs and Trade (GATT).13 In 1971, a key part of this, the system through which Western countries fixed their exchange rates to each other, thus providing stability for exporters and investors, collapsed, and the international financial system went into a period of much greater volatility. During the late 1960s and into the 1970s, economic growth went into a slowdown after the sustained expansion of the post-war period. The management of the economy along broadly 'Keynesian' lines (named after the British economist John Maynard Keynes) - using state expenditures and borrowing to smooth out booms and slumps
11 See IPCC, Climate Change 1995. A Report of the Intergovernmental Panel on Climate Change (Cambridge: Cambridge University Press, 1995); and IPCC, Climate Change 2001, Synthesis Report (Cambridge: Cambridge University Press, 2001).
12 IPCC, '2007: Summary for Policymakers,' in S. Solomon, D. Qin, M. Manning et al. (eds.), Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (Cambridge University Press: Cambridge, 2007).
13 They are known as 'Bretton Woods' institutions after the place in New Hampshire where the guiding rules of the global economy were agreed in 1944. The GATT was turned into the World Trade Organization in 1994.
in the economy, and to promote full employment - went into crisis. Of particular concern was the phenomenon of stagflation - simultaneous increases in inflation and unemployment. And of course, the oil crisis of 1973-1974, already mentioned as an impetus to changes in energy policy, also had a significant impact on the global economy. A similar shock occurred at the end of the decade after the Iranian revolution of 1979.
These events of the 1970s had four key consequences.
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