Labour’s Green New Deal faces a torrid credibility test. The world, post-Covid, will be nothing like the one preceding it.
- There will be no ‘V’ shaped economic recovery.
- Britain will struggle to avoid further economic decline.
- No one will be queueing up to shop their way out the current crisis.
- Large numbers of consumption-based jobs will simply disappear as the lockdown lifts.
To make matters worse, while jobs disappear, personal debt will not. Huge numbers of people will discover that the biggest con in Government rescue programmes has been that the interests of capital have come before those of country.
Deferred rent or mortgage payments are still debts to be paid; often by people without the resources to do so. This debt overhang threatens the prospects of small businesses as much as young families. At no time have the rentiers of capital assets been told to take the major hit on rent or mortgage payments.
Higher up the scale, government rescue measures have gone to corporate interests who frequently still bank offshore, pay out shareholder dividends and have taken no executive pay cuts. Britain will emerge from the current crisis in more financially polarised terms than we went in. And throughout the process, climate has barely received a mention. Any sustainable rescue plan will require a complete inversion of economic orthodoxies.
Tomorrow’s economics is going to be defined more by how we live than what we buy. To understand this, economics itself requires a re-boot.
The Climate Clampdown
The Covid pandemic has brought home the fragility of UK dependence on externalised supply lines. Britain’s inability to deliver PPE equipment to its hospitals and care facilities, or obtain sufficient respirators and aspirators to meet NHS needs, undoubtably cost lives. The pandemic also highlighted the fragility of existing globalised trade presumptions; cutting air freight and shipping movements by 50-60%, and leaving ports congested and containers ‘parked’ at sea. Climate crises will accelerate the Covid collapse of globalisation.
All credible economic modelling now recognises that, across the planet, sufficiency and survival have become paramount political considerations. Those predicting a sudden revival of globalised trade are on the wrong planet. The climate, as much as coronavirus, is already sinking this model.
On the one hand, coronavirus has delivered the largest ever fall in global carbon emissions. Carbon Brief puts the CO2 contraction figure at 5.5%/p.a. But this is still short of the 7.6% annual reductions needed to stay within the 1.5C Paris Climate target. It’s impact on global economics, however, has been dramatic.
The IMF estimates that global output losses in 2020 could reach $9 trillion. And this is before you factor in climate crises. Those without wages from production will not be looking for new global markets for consumption. It all argues for more localised /circular approaches to regeneration.
We are already in a period of wild weather. Droughts, infernos, floods, plagues of locusts and crop blights are playing havoc across the planet. This will get worse.
A climate clampdown is going to be with us for longer than the Covid one. Until a new international framework of mutual support emerges, resilience, security and self-sufficiency will become more powerful elements in the shaping of domestic politics.
This opens the gate to a different approach to climate economics; where reduced carbon-miles and reduced carbon-footprints become virtues rather than costs.
Labour’s Green New Deal could be a cornerstone of the transformative thinking this will need, but only if Labour too can let go of some traditional shackles and avoid obvious traps the government is setting set for it.
No Rescue for Reliant Robins
The Tories will want to bail out the past. High-carbon bankrolling might appeal to trade union insecurities but it would risk dividing the Labour Party. In the absence of a radical and visionary alternative, endorsing such intervention would leave Labour would sleep-walking into a barrage of derision.
Put bluntly, there is no case for a public stake-holding in airlines, fossil fuel ventures or conventional car manufacturing. You can’t rescue the Reliant Robin; especially not when an array of EV’s, E-bikes, and hydrogen/solar trains, trams and busses are already becoming the shape of tomorrow’s transport priorities.
Only steel makes the case for a domestic, public stake-holding. The repatriation of responsibility for UK iron and steel consumption would internalise the carbon footprint of global imports currently hidden from view.
Beyond this the unequivocal demand must be for an immediate end to all direct and indirect fossil fuel subsidies.
Labour may want to consider an argument in favour of a stake-holding in airports (if only because the land itself will always hold value). But airports themselves must be given annually reducing carbon budgets to live within. Nothing else will rapidly and radically cut Britain’s aviation carbon emissions.
Without doubt, the pressures to financially reconstruct yesterday will be enormous. To run with such demands, however, would be catastrophic. The only hope – for Party and planet – is to set a completely different agenda. In essence, this was the conclusion reached by Labour’s STT Working Group on Treasury Reform, prior to the last election.
The cornerstones of STT Working Group recommendations were that –
- Britain must cut its carbon emissions in half within the current decade,
- The emphasis needs to be on environmental repair, reduced consumption patterns, and social inclusion within a more circular economy, and
- For honest carbon accounting, imports and exports must be included In Britain’s carbon budgeting process (using import substitution to lighten the current footprint of product miles and concealed emissions).
Effectively, carbon budgeting needs to assume greater importance than financial budgeting. The one big ‘plus’ to come out of the Covid -19 crisis is that it forced the current government into massive financial interventions to avoid societal breakdown. Austerity is off the agenda, and must be kept off it.
Post-Corvid public debt levels will be massive. But these are neither unique nor insupportable. In 1835, just 2 years after passing the Slavery Abolition Act – the British government borrowed 40% of its annual income (the equivalent to over £300bn in today’s terms) in a massive rescue act. It was to compensate plantation owners (not slaves) for the ending of slavery.
UK taxpayers only finished paying off this questionable debt in 2015… almost 200 years later. Used wisely, today’s public debt can save the planet and repay itself over a far shorter period. What we must avoid, though, is throwing money at rescuing today’s problems rather than tomorrow’s solutions. It is the siren call Labour must ignore.
A Different Starting Point
As the coronavirus ‘lockdown’ lifts, Britain will be confronted with the scale of economic collapse that has taken place. Many of the disappeared jobs will have gone for good. A poorer general population will not be looking to binge-spend on consumption, entertainment or foreign travel. More will be worried about accumulated debt levels that they carry forward into the post-pandemic world.
Between 600,000 and 1 million younger workers will be without any work or prospects. This has to be Labour’s starting point, but it can also learn from the past.
In 1933, one month after his inauguration, President Roosevelt created the US Civilian Conservation Corps; recruiting some of the millions of workers abandoned during its Depression era.
In the 9 years that followed, 3 million workers planted 3 billion trees as part of a massive environmental repair programme.
This slowed soil erosion on 40 million acres of farmland, built
800 new state parks, 10,000 small reservoirs, 13,000 miles of hiking trails, a million miles of fencing and re- stocked America’s rivers with over 1 million fish.
Today, in the midst of the current coronavirus crisis, Pakistan has been following a similar line, paying unemployed workers to be part of their 10 Billion Trees project.
Labour’s call for a Zero-Carbon Army can capture both the mood and the moment that the Covid crisis has created. To deliver it, however, Britain will need a radical shift in powers and priorities, along with more devolved partnerships between the national and the local.
Important as they are, today’s New Deal can not be limited to trees, reservoirs and hiking trails. The coronavirus lockdown has opened up an international conversation about how towns and cities must work if we put the interests of breathing before driving. A raft of cities has already begun to do so.
By the end of 2020, Anne Hidalgo, the Mayor of Paris, will have installed 100 hectares of vertical gardens around the City. To an extent London joined in too.
But it has been Milan (in its bosco verticale programme around the City’s apartment blocks) and Barcelona that have taken this up on a more holistic basis.
Taking a different approach, Rotherham shifted the focus in its award winning Rivers of Flowers programme; seeding wild flowers along the major arterial roads into the city.
During the Covid crisis a raft of European cities has begun to use spaces opened up by the pandemic to ‘green’ their transport priorities; saying it with roads as well as flowers.
Paris has taken on the motoring lobby, creating 30km of bike lanes around the capital. The aim is to replace Parisian car journeys (which average 4.1km/day) with a structured plan promoting walking, cycling and public transport. Parisians are offered €50 towards the cost of repairing old bikes; all part of their €20m project to develop a clean transport infrastructure across the City.
Rome is constructing 150km of temporary and permanent cycle routes. Milan has transferred 35km of existing roads to cyclists and pedestrians. Berlin has re-designated 22km of new bike lanes, almost overnight.
This transformative movement already includes over 100 European towns and cities. A large number of UK towns and cities would like to incorporate the same air quality gains into their own modal shifts in transport priorities; creating designated roads and routes for cyclists and pedestrians only.
The problem is that Britain’s localities have far more limited powers (and resources) than their European counterparts, making it difficult for UK localities to be the drivers of dynamic modal change.
Before the last General Election, the independent Energy Systems Catalyst produced an analysis of UK carbon commitments. Their conclusion was stark and challenging: no single, quick fix technology can meet current UK climate targets. Moreover, Britain is unlikely to meet such targets without radical decentralisation. Their rationale was simple. Tomorrow’s energy systems will need to be interactive, crossing traditional separations between heating, cooling, power, storage, energy saving and transport. This is where European models of decentralised systems thinking become pivotal to the prospects of delivering a Zero Carbon Britain.
Energy saving then takes centre stage. A 30-30 Programme – raising the energy performance standards of 30 million UK homes and buildings (by 2030) – would deliver a huge number of green jobs, offer immediate opportunities for those displaced by economic collapse and profoundly change the life prospects of those in fuel poverty. It would also demonstrate how an economy based on consuming less energy does not mean less prosperity or security.
The key is to construct a joined-up policy platform, using different benchmarks and financing mechanisms. Britain could draw on an abundance of measures to deliver such a systems change approach. These could include –
- reinstating the Zero Carbon Homes standard for new buildings
- refusing planning permission for any new buildings connected to the gas grid
- requiring air handling systems to operate on a passive/clean energy basis (and setting rent ceilings on buildings with systems that fail to do so)
- placing a duty on energy network operators (DNOs/DSOs) to deliver annual reductions in both total demand and CO2 emissions
- giving localities responsibilities for delivering integrated heat and power systems (incorporating energy storage and transport needs)
- giving priority grid connection access to renewable energy; and socialising the grid connection costs of co-operatively owned projects
- making commercial property owners of buildings (below Band C energy efficiency rating) responsible for the property’s business rates/council tax
- requiring clean energy generation to be included in all property upgrades
- removing rate exemptions for empty properties
- placing a duty on localities to publish/deliver annual carbon reduction plans
- making food security/local supply part of UK resilience planning
- putting water auditing (floods, drought, SUDS, nature restoration and re-wilding) into local and regional planning responsibilities
- producing sectoral plans for accelerating the shift into renewable energy
- using ‘just-in-time’/local supply measures to reduce the carbon-miles content of production (and to boost resilience and domestic security of supply)
- redefining energy as a (not-for-profit) service rather than a market
- providing incentives for innovative approaches to re-cycling and re-use
- making air quality standards a mandatory obligation.
- giving localities a statutory ‘right of local supply’, promoting the growth of smart (and accountable) grids
- restoring National Grid’s original role as the provider of Britain’s strategic reserve, maintaining high voltage networks (and interconnectors), on a not-for-profit basis
- reconfiguring Ofgem; making it responsible for Britain’s Zero Carbon and climate commitments, with specific pre-2030 targets.
This is an illustrative list of transformative measures, not an exhaustive one. What it addresses, however, is the non-negotiable message from climate physics; there are no slow-track options left. Everything going into Labour’s Green New Deal proposals will need to pass three important tests –
Resilience – do proposals meet the challenges today’s climate emergency is already throwing at us – drought, flooding, wild storms, food security and heatwaves? Security – do proposals repair/restore the social infrastructure needed to better manage the next health crisis nature throws our way? And
Credibility – do they (measurably) meet the climate physics obligation to cut UK carbon emissions in half within the decade?
If politics doesn’t understand the pivotal importance of this final test, politics itself is going to be stuffed.
I have not touched on the financial levers needed to drive these changes. The Covid crisis has at least forced the government to kick open the doors of conventional financing, almost on a war-time survival basis. The task facing Labour is to use inspiration rather than desperation to keep these doors open.
Real change can still be driven from the Opposition benches. We need to recognise that political fortunes quickly disintegrate in the face of disruptive crises. The key is to have a visionary alternative on offer. Between them, the coronavirus pandemic and climate crises have trashed most of today’s economic modelling and presumptions. Burgeoning free-trade, globalisation and everlasting growth are dead in the water … or we are. The challenge Labour’s Green New Deal must address is to build a different, more enduring peace, not to restore a broken past.
It is this distinction that will make the Green New Deal offer sink or swim.
GND: an ecological re-boot
- Pandemic strains shipping, air and rail freight operators – Financial Times, 22 May 2020, https://www.ft.com/ content/8403ddbc-9363-11ea-899a-f62a20d54625 ↑
- Simon Evans, Carbon Brief, 09/04/2020, https://www.carbonbrief.org/analysis-coronavirus-set-to-cause-largest-ever-annual-fall-in-co2-emissions ↑
- IMF, The Great Lockdown: Worst Economic Downturn Since the Great Depression, https://blogs.imf.org/ 2020/04/14/the-great-lockdown-worst-economic-downturn-since-the-great-depression/ ↑
- Neil H Maher – Nature’s New Deal: The Civilian Conservation Corps and the Roots of the American Environmental Movement, OUP, 2008, p43. ↑
- for reference, see Local Energy, Alan Whitehead MP (publication date tbc) ↑