Mortgages and the Environment

What could the current mortgage and credit crisis have to do with the environment? Two things in my opinion.

The recent housing craze has driven consumption higher. This obviously has an environmental impact as we consume more and create more garbage. Rising home prices combined with cheap credit fueled consumption in areas such as cars, plasma televisions, second homes etc. Environmental footprints have increased as a result. The relationship between consumption and outsourcing cannot be ignored and the environmental degradation associated with production in developing countries is well documented.

Despite the tangible impact of consumption I feel there is a greater risk looming. Banks, lenders, hedge funds and other investors made risky investment decisions. Now, the risk is being realized. As with most major business/market failures a government bailout looms. Billions were poured into credit markets. As part of pre-election posturing, billions more will probably be given to homeowners who didn't read the fine print and signed up for mortgages that they could not afford. The risk lies in bailing out bad decisions. What if nuclear power turns out to not be so profitable if a distributed model with renewable energy as the source take over? What happens to all those hybrid batteries? What if tar sands are not viable if we move away from an oil fueled economy? Individuals and companies will be making investments in the environment and the future economy. Should we bail out the bad investments in oil exploration, nuclear power and automobiles after we have already subsidized them?