If you thought a growing economy was bad, try living through a recession. Environmentalists routinely denounce the "mantra" of economic growth, pointing out - quite rationally and entirely correctly - that infinite growth on a finite planet does not make mathematical, let alone ecological, sense. But the idea of a no-growth, steady-state economy has always sounded like pie in the sky - and you have only to read the papers every day to be reminded why. The credit crunch and looming recession in the UK illustrate nicely how the economic system knows only two options: growth or collapse. During good times, it seems almost impossible to imagine how anything could ever go wrong. Hence the willingness of investors and banks to snap up mortgage-backed securities without worrying how "toxic" these might turn out to be. In bad times, the reverse is true.

It is tempting for environmentalists to welcome recessions: after all, if you believe that rampant consumerism is killing the planet, then a sudden decrease in consumption can only be a good thing. A falling property market means that the pressure to concrete over the countryside is lifted. With higher fuel costs, people drive less and buy smaller cars. My local allotments association, once rather neglected, now has a waiting list of several years. Talk of new car-share clubs abounds, and more and more people are breaking the driving habit and taking to the roads on their bikes.

What is particularly noteworthy about the present economic crisis is that it has not - so far, anyway - led to a drop in oil prices. With the world's largest oil-consuming country, the United States, in full-scale recession, and other western countries beginning to follow suit, the ensuing drop in demand for oil ought to lead to downward pressure on crude prices. That it has not produced such pressure - and the price per barrel continues to hover just below $150 - suggests that fears about long-term supply, often aired by the so-called "peak-oilers", are well founded.

Combined, the credit crunch and oil crunch have delivered a double shock to the world economy. And with climate change raising the risk of weather-related damage to crops, and so driving up food prices, one group of thinkers has begun to use the term "triple crunch" to describe the present situation.

This group, which launches a landmark report on 21 July calling for a "Green New Deal", consists of two former directors of Friends of the Earth, the Guardian's economics editor, Larry Elliott, the Green Party MEP Caroline Lucas and Andrew Simms of the New Economics Foundation, among other luminaries. The report is still under embargo at the time of writing, so I cannot delve into it too deeply, but what I find striking and novel about its content is the clear attempt to bridge the credibility gap between whimsical environmentalism and the harsh real world of everyday economics.

The Green New Deal Group is not talking about incremental changes, however. It is calling for nothing less than a return to pre-war Keynesianism - complete with big increases in public investment spending and much tighter controls on international finance - with a "war economy" social mobilisation harnessed, this time not towards fighting fascism, but towards heading off ecological crisis. What is novel is that this call is directed not just at stabilising the climate, but also at stabilising the economy - lower interest rates and higher government spending are aimed at ending the credit crunch as much as tackling the oil and climate crunches.

Indeed, everywhere you look, environmental thinkers are embracing the market. All the various greenhouse-gas-regulating frameworks under serious discussion depend crucially for their success on high carbon prices sending a signal through the market rather than through direct government regulation. The recent Time for Plan B report from the US-based Earth Policy Institute calls for 80 per cent cuts in carbon emissions by 2020 - but sees this, crucially, not as a belt-tightening sacrifice, but as an opportunity for renewed growth.

For example, to achieve Plan B's target of three million megawatts of new wind capacity in the next 12 years we'll have to put up 1.5 million turbines. That seems an unfeasibly large number, until you consider that 65 million cars are produced worldwide each year. Indeed, the report suggests, some of the turbines could be produced "on idled automotive assembly lines, reinvigorating manufacturing capacity and creating jobs".

Keynes would have been proud.