The Climate Imperative before Coronavirus
Prior to the outbreak of coronavirus, the global environmental outlook seemed bleak. In December 2019, referring to the threat of climate change, United Nations Secretary-General Antonio Gutteres said: “The point of no return is no longer over the horizon. It is in sight.” A 2019 Intergovernmental Panel on Climate Change report estimated that human activities had caused one degree of global warming above pre-industrial levels, and suggested 1.5 degrees of warming would be likely reached by between 2030 and 2052 at the current rate. The Panel’s work demonstrated the urgent need to limit global warming to a 1.5 degree increase. Though a 1.5 degree increase would still bring severe weather and temperature impacts, impacts on species loss and ecosystems – as well as climate-related risks to health, food security, and water – would be much lower at 1.5 degrees. At the same time, in 2019 a United Nations report suggested one million species would be pushed into extinction in the next few years. The United States announced it was leaving the Paris Agreement and other countries refused to ratchet up commitments made under that Agreement.
In the United Kingdom, environmental leadership from the government had also been profoundly inadequate. The Committee on Climate Change set out 25 policy actions for the year ahead in 2018. A year later, in its mid-2019 update report, the Committee observed that 24 of those had not been delivered. The Committee noted that the UK was ‘on-track’ in relation to only 7 out of 24 key environmental indicators. It said the Treasury “must engage more with the delivery challenge for reducing emissions”, that BEIS had “held back deployment of onshore wind” and that other departments, including transport and housing, “must do more to prioritise emissions reduction”. The UK was not expected to meet its 2021 legally binding target for water pollution, with the Environment Agency labelling water companies’ environmental protection efforts “simply unacceptable.” ClientEarth said in late 2019 that 83% of reporting zones in the UK had illegal levels of air pollution, with no progress shown in meeting obligations that should have been met in 2010; 40,000 early deaths were estimated to have been caused by air pollution every year in the UK. The country – and the world’s – record in tackling climate change, and protecting the environment, left many deeply concerned about the future of the planet. Yet 2019 also saw people-driven environmental movements gain more visibility than ever before, in the face of political inertia. Following years of protest by Indigenous peoples and other campaigners, international strikes and protests received greater media attention: including three school strikes in 2019 (inspired by Swedish activist Greta Thunberg) and the actions of Extinction Rebellion. There appeared to be a growing groundswell of commitment to environmental justice – even if vested interests were going nowhere.
The Environment during the Crisis
The world was then rocked by the outbreak of coronavirus from January 2020 onwards, for a period relegating discussions of climate change to the margins of media reporting and political attention. On 1 April the Glasgow COP-26 climate talks were postponed until 2021. There appeared to be a risk that climate change would be neglected in policy-making, in particular immediately after the crisis.
But the plummeting of US oil prices in April, which reached a point where the price went below zero (meaning oil producers would pay consumers to take oil off them), sparked some renewed discussion of the environmental challenges ahead. Oil demand had been dropping, only for suppliers to continue to pump out and store oil; as storage space ran out, the oil price (for crude delivered in May, which would usually be $40 per barrel) turned negative. The co-founder of Labour for a Green New Deal, Chris Saltmarsh, responded by arguing that the dying oil industry should not be resuscitated. Saltmarsh proposed a “managed windup of fossil fuel production and just transition guarantees”. This would include an end to fossil fuel subsidies, no new exploration for fossil fuels, and a nationalisation of the oil industry to enable managed decline. Publicly funded retraining of workers would be essential, Sandmarsh said, to ensure the transition does not involve job losses. As well, Saltmarsh called for “investing to create new public industries that address the unemployment crisis and the climate crisis at the same time”, centred on “a massively expanded renewables sector to supplant oil, gas, and coal.” Eleanor Salter, policy lead for Labour for a Green New Deal, also called for a frequent flyer levy to scale down air travel in the aftermath of the crisis – a move “preferable to bailing out Virgin Airlines.”
A group of progressive academics, including Nicholas Stern and Joseph Stiglitz, produced a lengthy paper for Oxford University’s Smith School in May calling for recovery policies to deliver economic and climate goals. The academics noted that in 2020 global greenhouse gas emissions would fall by more than in any other year on record. But this will have to be repeated every year to reach net-zero by 2050; the academics observed that we must not “leap from the COVID frying pan into the climate fire.” The academics suggested that momentum to fight climate change might find new impetus if communities recognise that human omnipotence needs to be humbled; if there is a revaluing of clean air and wildlife; and if the value of decisive public interventions is recognised. Surveying expert groupings about green recovery policies, they found particular support and evidence for clean physical infrastructure investment; improved insulation; education investment; natural capital investment; and clean R&D spending. The authors of the study said that in the UK context this would make some projects more attractive than others: energy efficiency programmes for the UK’s housing stock, electric vehicle charging networks, better road design for cycling, and tree-planting.
Other campaigners and writers highlighted that a post-recovery Green New Deal must be global if climate change and other threats are to be tackled. Debt relief is needed, many have said, so that the Global South can contribute to green investment efforts, a point discussed in another position paper. The United Nations Conference on Trade and Development (UNCTAD) has called for “a coordinated investment push on an unprecedented scale and across the entire global commons” to tackle the climate and natural emergency, with South African climate justice campaigner Alex Lenferna suggesting that the Global North should help to pay its fair share as part of reparations for its historical role in imperialism. Academic Jayati Ghosh has called for a rethink to global food supply chains – which currently encourage “produce from one part of the world to be shipped to another part of the world for processing, before coming back to places near its origin to be consumed” – as one tool in the fight against global fossil fuel emissions. Such a move would require international agreement and international institutions to take a lead.
Investment for a Green Recovery: Policy Options
Some of the proposals relevant to a green recovery are discussed in other position papers, such as public ownership (including of transport and energy). Thinking beyond the immediate demands of a coronavirus crisis, such as the design of bailouts, three medium- or long-term policy options appear especially attractive.
First, as part of putting a green recovery on an ambitious and medium-term footing, there is a case for the Government establishing a green Ministry of Public Works. The idea of a Ministry of Works or Public Works has been floated in New Zealand as a way to create jobs and kickstart investment, once it is safe to go back to work. The UK Government had already made infrastructure a centrepiece of its 2020 budget. But it had been vague on how that infrastructure would be delivered, leaving open the possibility that it would simply transfer government money into the hands of private sector infrastructure providers (and their shareholders). A Ministry of Public Works could secure publicly owned infrastructure, coordinate training and construction, and guarantee well-paid unionised jobs, working in conjunction with local authoirties. Direct government support for builders, joiners, painter-decorators, and others would be an important statement about valuing jobs occasionally denigrated as ‘low-skilled’. The Ministry could indirectly challenge practices in the construction sector, such as bogus self-employment (which have been highlighted by Unite), by employing people directly. It could also show that the insourcing of services saves money in the absence of a need for expensive lawyers and consultants. As well, it could serve to build back public capacity following the hollowing out of government through outsourcing over a period of years.
The Ministry of Public Works, if established, should prioritise green projects that will decarbonise and regenerate the United Kingdom. These could include a plan to plant £2 billion trees, which could employ young people, who have been particularly affected by the coronavirus crisis (with some estimates suggested youth unemployment might reach over one million by the end of 2020). Other national missions might include installing insulation, double-glazing, and renewables in almost all homes; renewable energy expansion; building 100,000 new council houses a year; building walking and cycling routes; or rolling out a public full-fibre broadband network. Expanding employment (with one option being that a Ministry of Public Works is tied to a job guarantee) will raise tax revenue, with improved infrastructure enhancing productivity. (There is a risk that the recovery prioritises public works jobs over care jobs, which could have gendered effects, and other position papers on NHS and social care, and public ownership, underscore the need for care to be central to the recovery alongside a Ministry of Public Works: care jobs are green jobs.)
Second, problems with the role played by the British Business Bank and retail banks in administering business loans and support during the coronavirus crisis point to the need for a National Investment Bank, which could play a central role in decarbonisation. There is growing support for a National Investment Bank across the political spectrum, and the UK is fast becoming an outlier in not having a state development bank. Giles Wilkes, former advisor to Theresa May, has written for the Institute of Government that “the British Business Bank works well within its constraints, but those constraints apply best when the financial system is operating normally and ordinary rules around use of public money apply.” He adds that “a new institution with a new remit to oversee the kind of direct investments and grants needed for a prolonged crisis” may be needed. The thinktank IPPR has also said “there is a strong case for transforming the British Business Bank (BBB) into a fully-fledged national investment bank with the ability to borrow and invest at scale.” As the IPPR notes, the British Business Bank cannot leverage its own balance sheet (unlike normal banks), and has a narrow remit. A National Investment Bank could have a broad and ambitious focus on lending for infrastructure and SMEs, with an overriding goal of decarbonisation. This could provide essential resourcing for green projects, as well as skills and capacity-building for these projects. As Stephany Griffith-Jones and Peter Rice have pointed out, other state development banks such as Germany’s KfW – which has played a catalytic role in funding solar and onshore wind – have played a role in decarbonisation; Griffith-Jones and Rice also suggest the National Investment Bank could indicate it will not lend for fossil fuel projects as part of facilitating a just transition. As this paper was being finalised, there were reports that the Treasury was drawing up plans for a National Infrastructure Bank. It is important that its remit is not too narrowly drawn, that it is well-capitalised with an initial strong injection from the state, and that it focuses on rapid decarbonisation and innovation, as well as bricks-and-mortar infrastructure. There may be a need, too, to use the existing public stake in RBS to ensure it pursues public interest objectives supporting the objectives of a National Infrastructure Bank, a point made in a 2019 report on public banking.
Third, major investments in education, science, and R&D for the just transition could be a lodestar of the green recovery. The Committee on Climate Change has underscored this in a letter to the Prime Minister in May. This investment was pinpointed by the Smith School study already mentioned as a key post-coronavirus intervention. Education and R&D policy of this kind could prioritise the retraining of workers in aviation and the fossil fuel industry and support for renewable energy research (with the option of public stakes being taken in research funded by the state). To ensure any action in the United Kingdom is taken with an eye to the international challenge of tackling climate change, the government could also commit to offering technology developed in the United Kingdom cheaply or free to the Global South, partly as an act of reparation for historical injustice. These are simply some of the ideas that could form the basis of green demands in a post-coronavirus economy. Other options (some of which go beyond ‘investment’ and are mentioned in other position papers) might include:
Bringing buses into public ownership to stabilise the markets following a drop in public transport usage, and as one step towards making public transport free of charge as far as possible, a goal supported by Greenpeace; Amending competition law to indicate that high-emitting activities should not compete with public transport options, building on France’s direction that airlines cannot compete with domestic rail services as a condition of bailouts; Enabling Bank of England credit guidance to encourage green lending; Strengthening the requirements for listing on the London Stock Exchange to encourage more climate-friendly practices; Investment in a climate apprenticeship programme; and Bringing energy transmission and distribution networks into public ownership to facilitate planning and coordination of energy usage.
This is a generation-defining moment. We can choose to move out of the coronavirus crisis and revert to ordinary high-emitting, environmentally destructive practices that have brought our planet on the brink of overheating. Or we can decide that the catastrophic damage to human life, communities, and economic wellbeing caused by the coronavirus crisis provides the opportunity for a reset. As we build back, we can commit collectively to building infrastructure differently, so that it is in public hands. We can set up new institutions that will outlast us, like a National Investment Bank, in the same way that the crisis of the Second World War led to the establishment of the National Health Service. We can invest in education that will prepare us for a greener future. The coronavirus crisis has shown – for example, in housing rough sleepers – that it was political will that held back politicians to take on deeprooted social and economic challenges. We now need political will, backed by a popular movement, to take on vested interests that would hold back the long-term green investment that we so desperately need to protect the planet and build a better society.