Building back better with a green recovery
Covid-19 has inspired a focus on the climate and nature crises and a green recovery of the economy, writes Paul Scholes.
Back in 2007, as the economic crisis began to evolve, talk began of a transformation along the lines of the New Deal employed during the financial crash of the 1930s by US president Roosevelt.
In the UK The Green New Deal Group was formed and, in 2008, it published its Green New Deal (GND) with proposals for kick-starting the economy, rectifying the failed financial system and dealing with climate change.
This has developed over the years, adding emphasis on the ecological emergency, public engagement and a move away from established economic measures incorporating fairness and wellbeing.
By 2019, US politicians had also taken up their own GNDs and, in the UK, The Green New Deal Bill (formally known as the Decarbonisation and Economic Strategy Bill) was presented to Parliament.
Whilst efforts were made in the UK to promote the GND as non-party political, it was categorised by some as a left-wing agenda and so with Brexit and then the election, the bill has come to nothing.
Now with 2020 vision
Perhaps because more people can now appreciate the benefits of a less frenetic lifestyle and have discovered the important things in life, such as nature, clean air, health care, and collaboration, the Covid-19 crisis has given the demands of the GNDs a huge new pair of wings in the form of the green recovery.
Whilst crises in ecology and biodiversity (teamed as “nature”) had been recognised in the GNDs, they tended to be seen as secondary to climate. This is no longer the case. The green recovery encompasses both climate and nature with many aspects of the latter looking to pose a greater threat.
Googling or searching on social media for “green recovery” or “build back better” will unearth literally hundreds of reports and articles from every stratum of society, including business leaders, city and state mayors/governors, bankers, accounting bodies and politicians, all of whom have uttered these phrases in positive tones.
Whilst these phrases mean different things to different people, the transition to the activities and methods they describe are designed not only to deal with the climate and nature crises but also provide new jobs and investment opportunities - in particular for SMEs, many of which have been severely damaged by Covid-19.
Common issues to be addressed are:
- Any short-term financial rescue packages for companies, in response to the coronavirus outbreak, should be granted only on strict conditions that are compatible with a green recovery. So polluting sectors should be required to take immediate steps to align with the Paris Agreement temperature targets and to develop a long term plan to decarbonise.
- In order to get back on track for its 2050 net-zero carbon commitment, priority should be given to meeting the fourth and fifth carbon budgets and also the international targets on halting and reversing biodiversity loss.
- Immediately reduce reliance on fossil fuels, authorising no new developments, withdrawing subsidies and planning for the transition of the workforce to jobs in the renewable energy and associated sectors.
- Use of carbon taxes and pricing to recognise the cost of fossil fuel production/use, including those attaching to imports, and to fund green recovery projects.
- Accelerate and expand renewable energy approval and investment as well as upgrading the electricity grid to a smart, secure and flexible energy system, incorporating storage and clean hydrogen production.
- Speed up the transition to electric vehicles and related infrastructure, developing current expertise in battery design.
- Expand, electrify and increase the affordability of public transport to ease congestion, and redesign urban transport to prioritise walking and cycling.
- Require all new buildings to support net-zero emissions and start a home and public sector energy efficiency programme (eg retrofitting).
- Restore and enhance nature and wildlife, including flood and coastal resilience and marine protection.
- Encourage a transformation of farming and the food industry to reduce carbon, chemical and waste and expand local food provision.
- Design and deliver programmes for suitable tree planting, rewilding and peatland restoration.
- Work towards a zero-waste “circular economy”.
Recognising that the climate and nature crises have a disproportionate effect on the least well off, many of the reports recognise fairness (ie reducing inequality) as a key feature of any initiative. For example, quoting from the Committee on Climate Change’s letter to the PM in May 2020:
“Embed fairness as a core principle. The benefits of acting on climate change must be shared widely, and the costs must not burden those who are least able to pay, or whose livelihoods are most at risk as the economy changes. Lost or threatened jobs of today should be replaced by those created by the new, resilient economy.”
Inevitably this leads to discussions over both redistribution of established wealth and/or methods of predistribution, in which governments catch and avoid inequality happening as the wealth is being created.
These discussions also result in reassessing our preoccupation with shareholder value described by former CEO of General Electric, Jack Welch, as the dumbest idea in the world.
The elephant in the room: economic growth
Of all the issues up for discussion in the green recovery and beyond, the transformation of economics and, in particular, economic growth, is probably the one with the widest divergence of opinion. In fact, many green recovery plans make little if any reference to it, preferring instead to maintain current economic models to cater for damage reduction, new industries and redeployment of labour.
However, many recognise that the economic models employed by developed countries over the past century and a half have greatly depended on extractive industries (fossil fuel) to create growth, which has not only resulted in the environmental emergencies but has also created huge economic and social inequalities, particularly in the “global south”, with, ironically, those populations now at most risk from the effects of climate and nature change.
Consequently, as mentioned above, many reports include demands for changes to economic structures to address national and international levels of inequality and most recognise that this means reconsidering economic growth and whether GDP is fit for purpose as a measure of progress.
Even the creators of GDP back in the early 20th century recognised its limitations and this doubt has been echoed ever since by economists and politicians. One quote that stands out is from the 1968 speech by the former US Attorney General, Robert F Kennedy who summarised the limitations of GDP in the following way.
He said it measures “neither our wit nor our courage, neither our wisdom nor our learning, neither our passion nor our devotion to the country.” GDP measures “everything, in short, except that which makes life worthwhile”.
Over many years, therefore, other methods of measuring human progress and success, known generally as “wellness indices”, have been devised, to sit alongside, or replace GDP. A comprehensive list of these can be found in this briefing from the All Party Parliamentary Group (APPG) on Limits to Growth, with this internationally agreed list of Sustainable Development Goals (SDG) being a good example.
If economic growth is mentioned at all, opinion seems to be split between the following two camps:
The first (the majority) believes that we can have “sustainable” growth (aka green growth), where economies can grow within safe planetary and natural resource limits and without borrowing from the needs, or damaging the prospects, of future generations. An example is SDG 8.
The second believes that growth of any kind is neither justifiable nor necessary. They argue that whilst economic growth has provided huge benefits the richest countries have had enough and, in any case, we have no time left to try out sustainable growth and may even need “degrowth”.
In whatever form, or forms, it takes, the green recovery together with the continuing climate and nature emergencies will result in significant changes in what we used to see as normal but, as with any change, there are valuable benefits and opportunities to be enjoyed.