Posts that originate on this blog quite often end up being reposted on Brave New Europe. This morning the direction of travel is in the other direction, largely because my old friend and long-time Green New Deal Group colleague Colin Hines has given me permission to repost this excellent piece:
One thing rarely mentioned in the wall to wall coverage of the coronavirus outbreak is how the measures taken are inadvertently helping the fight against the climate emergency. In China, the world's largest carbon emitter, there has been a 25% reduction in the carbon dioxide pumped into the air thanks to less coal burning and the reductions in traffic. The International Energy Agency (IEA) expects the international measures being taken to control the coronavirus should cap global fossil fuel emissions. If this trend continues some analysts even think it is possible this will lead to the first fall in global emissions since the 2008-09 financial crisis.
Of course the key question is how can these medium term efforts to deal with the coronavirus be built on and turned into a permanent green bridge towards tackling climate change. The key in the view of the IEA's executive director Fatih Birol, is for governments to use green investments to help counter the global slowdown. He said “We have an important window of opportunity. Major economies around the world are preparing stimulus packages. A well designed stimulus package could offer economic benefits and facilitate a turnover of energy capital which have huge benefits for the clean energy transition.”
The role of government is so crucial because the IEA's analysis has shown that 70% of the world's clean energy investments are government-driven, either through direct government finance or in response to policies such as subsidies or taxes.
An Example from the UK
One reason why such a positive transition from dealing with the coronavirus to tackling climate change might occur worldwide is provided by looking at what has happened in the UK. The Prime Minister Boris Johnson, channelling his inner Greta Thunberg, daily asserts that experts “know how to defeat it” and the Chancellor Rishi Sunak has promised to spend, spend, spend to give the NHS “whatever it needs”.
These illustrate two of the three approaches emerging for tackling the coronavirus that will also be central for tackling climate problems. Firstly a panicked political class will continue to do what the ‘experts' advice them. Secondly the huge cost of propping up care and health systems and supporting a generalised weakening of the economy will need massive increase in government borrowing and doubtless the need to resort to coronavirus QE (quantitative easing). Thirdly personal freedoms to do things that would otherwise make matters worse, such as travelling where we want to, bulk buying whatever we feel we need, whenever we want it, will be constrained by the state.
These massive, three pronged changes introduced to deal with a medium term virus crisis can also be used to tackle the longer term climate crisis. They can act as a battering ram to break down the establishment's doors at present blocking adequate and rapid enough responses to climate chaos. This will involve listening to climate experts, funding the transition needed through massive government borrowing and Green QE and introducing policies to curb our ‘freedoms' to travel, eat and consume in ways that threaten the planet.
A first step on the green bridge from tackling corona virus to tackling climate chaos
The UK Chancellors recent budget missed a huge opportunity to help rebuild his nation's economy in a way that could protect the planet when he failed to prioritise funding a nationwide training and works programme to make all the UK's 30 million homes and workplaces energy-efficient. Such a massive green programme would generate jobs in every constituency, and business and investment opportunities countrywide. It would also enable the government to substantially build on the commitments it made in its election manifesto to reach net zero by 2050 and to invest £6.3 billion to improve the energy efficiency in over 2 million disadvantaged homes.
Expanding this approach to the rest of Europe and to the United States is also crucial, as I pointed out last year in Brave New Europe. There are roughly 300 million homes and other buildings in the European Union and they currently represent almost 40% of total final energy consumption. Therefore making them all carbon neutral and so providing jobs in every community can make a crucial contribution to the growing demands for a European Green New Deal that addresses both environmental and social concerns.
The US Green New Deal also has at its heart making every residential, business and industrial building energy efficient. Given there are around 140 million residential buildings alone in the US this by definition means jobs in every district in the country, both Republican and Democrat. Given President Trumps disastrous handling of the coronavirus outbreak in the US, such a Green New Deal, with its additional emphasis on healthcare for all, will doubtless be the cornerstone of the Democrats' attempt to hopefully defeat Donald Trump this November.
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The average UK house price in the year 1970 and 2020 are near enough to £5000 and £235,000. I’ll leave you to work out what the averaged inflation rate per month is over 50 years or 600 months but this is surely hyper-inflationary. However, talk to the average voter or politician about the UK government being able to create money without liability to any other entity and the usual reaction is the government will automatically create hyper-inflation if it’s allowed to do so and it must be forced to balance its books to prevent this.
Clearly the cognitive dissonance going on here is immense and that’s not even to ask these voters and politicians where can the money come from, taking the private sector as a whole, to repay the interest on bank loans such as house mortgages when the country runs a persistent current account deficit.
What chance therefore of persuading voters and politicians that massive government creation of money is necessary to tackle climate change. Already many of these people cannot make the link between the grossly inadequate number of intensive care beds in the NHS to tackle coronavirus victims in poor shape and years of austerity cuts to the NHS from right-wing Conservative and Labour governments.
There clearly needs to be a massive push to educate the public in money creation mechanisms in order to tackle climate change but where is it going to come from? The Labour leadership election hustings show no sign of the two issues being linked together. The British appear to have lost the plot although this is true of a great many other countries. Market fundamentalism currently appears to have a death grip on the world!
The really critical and most important question therefore is it’s all very well shouting loudly that climate change is threatening the very existence of life as we know it on the planet but what initiative for mass re-education on monetary system mechanics in the UK is possible to clear the way for the large amounts of public spending needed to be spent tackling climate change. Thinking caps must be donned to figure out how this might be achieved!
Surprisingly, a growth rate of 8% per annum is enough to turn £5000 into £235,000 over 50 years. That’s the beauty of compound interest. So high, but not hyper.
And massively beyond real growth rates
Irrelevant comment! Check out the annual gross average worker salary for 1970 and 2019 and the ratio for salary multiple for the average house price has nearly doubled in 50 years. If you consider that’s a normal state of affairs for a nation you need your head examining!
I agree with your point Helen about the hypocrisy surrounding the fact that individuals do not have to live within their means and can go into debt for personal consumption (stuff). These are the same people that help constrain Governments by purely ideological means when it comes to supporting the economy and preventing much needed investment by portraying such spending as unpayable debt.
It is another version of the ‘public – bad / private-good’ trope.
I would also say that their needs to be discussion too with people about personal debt. I think modern society has sleep walked into accepting debt as a fact of life. The work of Louis Hyman about credit in the USA is worth looking into about this worrying phenomenon. Look at the Experian adverts on TV – encouraging you to look at your credit score rather than what is in your bank account!!! WTF!? We all know that it is the credit cycle that is the engine of boom and bust.
As to how we have these conversations – well for those of us who are aware the simplest thing we can do is raise it as an issue in discussions with others as often as you can. I was talking to my brother who lives in Eire last night and we were having an amicable conversation about BREXIT and I told him about the credit default swaps behind Johnson’s Tory party funding – he felt that more people should know and that CDS’ should not be allowed to exist. He just was not aware.
We will just have to keep picking away with our tea-spoons until some for mass delivery of these facts can be provided.
I agree with the sentiments expressed by the writer in the article wrt funding and Mrs Schofield regarding most regions inability to recognise that the investments needed are of a scale that require government intervention: i.e. investment. The European Union is a case in point — there continues to be resistance to involve the ECB — although the printing presses are currently running (Euro20bn/month) to fund………banksters. Yes bond buying is back. Yawn.
One area where I diverge is the role of the IEA. For close to 30 years, the IEA has dismissed renewables with faint praise (& demonstrably false data), been a fan boy of coal until the early 2010s, & continues to support gas “as a bridging fuel”. One of the reasons we are in the current emergency situation is due to the IEA. Birol is a lying glove puppet. He knows what the score is (the man is not stupid) but for the past 10 or more years has slavishly followed the “fossil fuel is great” path defined for him by IEA members and he fossil fuel mafia. The IEA and Birol are liars, I would not trust them to tell me night from day.
Classic and typical ignorant statement from left of centre mainstream media which may as well read:-
“Once more we are fighting a war with borrowed money, only this time it is not to rescue the country from the vile coronavirus but to save the planet from climate change …. (but) …. Sunak has an opportunity in the autumn to show we are all in it together, and tax the wealthy to fill the holes in his budget. If he piles debt upon debt, it won’t just be the UK’s growth rate that looks Japanese.”
https://www.theguardian.com/uk-news/2020/mar/14/rishi-sunak-budget-2020-spending-spree-investment-productivity
I saw this too – it’s Phillip Inman.
Inman needs to rotate out of economics and go into astrology or something like that.
Astrology would be more appropriate for many of the Guardian’s journalists who mindlessly espouse right-wing policies whilst being convinced they’re progressives! Not a lot of critical thinking taking place there or indeed in most of the country present blog excepted!
That article was so poor….