It’s official: we haven’t had a financial crisis like this since at least 1603, and commentators here in the U.K. seem to agree that things can never be the same again. Capitalism, if not in question, will be a very different beast from now on. Think donkey on short leash.

It’s all a bit frightening, and though we’re still in the midst of the storm, a growing band of voices here in the U.K. is beginning to see the opportunities for sustainability thinking to emerge strengthened by an unwelcome catharsis.

Take Sir Nicholas Stern, for instance. In his landmark 2006 report on the cost of addressing climate change, he came up with a figure of about 1 percent of GDP — in the U.K., that’s about $20 billion per year. Some economists have since challenged the urgency of doing something on the basis of the discount rate Stern used (as if nature would give a toss). But a more common objection — that this number was far too great to contemplate — is put in stark perspective by Chancellor of the Exchequer Alistair Darling’s $85 billion plan to save the banks.

Fortunately, Stern didn’t shut up. Speaking at the launch of a new climate change economics center at the London School of Economics, he acknowledged the fears people may have about the short term, but said that the current crisis shows the consequences of not managing risk early. With higher energy prices and less disposable income, energy efficiency will look sensible for many consumers. Stern sees great potential for renewable and other low-carbon technology to be an important part of stimulating the economy and prompting the growth that will be needed for a recovery.

Other commentators take a more trenchant line. Forum for the Future’s new report on Climate Futures has analyzed the social, political, economic, and psychological consequences of climate change in scenarios for 2030, illustrating how the actions we do or do not take in the next few years can lead to very different future societies, some of them with very limited appeal.

Writing in October’s Green Futures magazine, Jonathon Porritt — prescient author in 2005 of Capitalism As If the World Matters — sees something of a vanishing point for the capitalism we’ve come to know:

 

In all coverage of the market meltdown, I have seen few, if any, connections made between these toxic time bombs — financial and ecological. You might think they were totally separate phenomena. In fact, they are both products of precisely the same kind of limits-defying, cost-externalizing, profit-maximizing capitalism that has dominated people’s lives for the last three decades. A global economy built on debt-driven consumption and the liquidation of the natural capital assets on which all our lives still depend was guaranteed to self-destruct. It was only a question of when. Now we know.

Porritt’s view, increasingly shared by others, is that this financial shock is the front end of a much more profound readjustment that we must now make in our relationship with each other and with nature. Capitalism must be about protecting and building the only capital stock that really matters — that of natural capital, on which all other stocks and flows depend.

Echoing his view, the New Economics Foundation and others have just published The New Green Deal, in which an investment similar in flavor to Roosevelt’s New Deal could stimulate a massive acceleration of low-carbon technology and energy efficiency.

Will the British government be interested in such thinking? There may not be much room for radical proposals in Gordon Brown’s bunker in the next few weeks, but the recent cabinet reshuffle may indicate some reordering of priorities on these issues. I have no idea what kind of defense secretary John Hutton will make, but it’s a relief that he is no longer running the Department for Business, Enterprise & Regulatory Reform (BERR), where he orchestrated the renaissance of nuclear power almost single-handedly. Where the return of Peter Mandelson to the cabinet will take us on business issues remains to be seen, but more interesting is the creation of a new Department of Energy and Climate Change to be led by Ed Miliband, taking away BERR’s energy responsibilities (and hopefully rescuing energy policy from the odd cabal of nuclear enthusiasts there, or at least ending the long-running feud between the industry and environment departments).

Ed, brother of the more famous David, is a bit of an unknown quantity on climate change, but he’s from a younger generation of leftists who see the environment as part of their agenda. He faces some interesting tests immediately — on whether to allow a new coal-fired power station in Kent, on whether to allow Electricite de France to build a new generation of nuclear power plants in Britain, and on how to respond to calls last week from the government’s committee on climate change to raise the bar on greenhouse-gas-emission-reduction targets. Under the chairmanship of former Confederation of British Industry head Adair Turner, the committee has called for an 80 percent cut by 2050, repeating Stern’s estimate that it will cost between 1 and 2 percent of GDP.

Turner claims that we can make the reduction “by using energy more efficiently, by investing in new energy sources, and by making relatively minor lifestyle choices.” Maybe he’s right, but the real test is not whether we think 80 percent is necessary by 2050 — when most of the current cohort of politicians and business leaders will be dead — but whether we can make a 4 percent cut next year, and every year after that.

A radical reshaping of capitalism in the next few months may be just what the doctor ordered.