Tuesday, 16 June 2015

There are no jobs on a dead planet

David Begg: German Chancellor, Angela Merkel, appears to have achieved something of a victory in persuading the G7 group of leading industrial nations to embrace a serious initiative on climate change last week.

They agreed to back the recommendations of the IPCC, the United Nations’ Climate Change Panel, to reduce global greenhouse gas emissions at the upper end of a range of 40 % to 70 % by 2050, using 2010 as a baseline, by phasing out the use of fossil fuels by the end of the century.

This is an important development in the lead in to the crucial UN summit in Paris in December 2015. If followed through this could presage a green industrial revolution. What does this mean?

According to Mariana Mazzucato (2013) the basic premise is that the current global industrial system must be radically transformed into one that is environmentally sustainable. Sustainability will require an energy transition that places non-polluting clean energy technologies at the fore.

It moves us from dependence on finite fossil and nuclear fuels and favours ‘infinite’ sources of fuel – the ‘renewable’ fuels that originate from the sun.

Building a sustainable industrial system also requires better agricultural practices, stronger energy efficiency measures, high quality water infrastructure, technologies for recyclable materials and advanced waste management.

A green industrial revolution must transform existing economic sectors and create new ones. It is a direction that continues without a clear stopping point but with a growing public benefit in the form of avoided planetary destruction.

Closely tied to the concept of a green revolution is the problem of climate change. Climate change is a global environmental crisis that impacts all of us and which is a direct result of current centres of major economic activity. Climate change is driven by the emission of greenhouse gases (GHGs), and the majority of these gases are a by-product of the dominant energy production technologies (fuelled especially by coal, increasingly natural gas, but also oil) that power modern economies.

It is important to realise that we simply have no choice but to act, and act decisively, in this matter. We know that the science is unequivocal. Without urgent and ambitious action we will face a temperature rise of 4°C or more this century and irreversible changes in our climate. Climate catastrophes and extreme weather-cyclones, tsunamis, floods, droughts, fires, melting glaciers, season changes, threats to agriculture and more  ̶  are increasing.

In a recent ‘Financial Times’ article, Martin Wolf made the point that even if governments met current commitments (itself unlikely), atmospheric concentration of carbon dioxide would rise towards 700 parts per million (PPM) by the end of the century, as against 280 PPM before the industrial revolution and some 400 PPM now. With 700 PPM the median increase in expected global temperatures is 3.5°C. Keeping emissions on the path needed to limit the median expected increase to the recommended 2°C does indeed require a green revolution.

It is still possible to avoid surpassing the 2°C temperature rise threshold, and it will continue to be possible for the next few years. After that the window will close and the opportunity to maintain global warming on a manageable scale will be gone.

The solutions are known. They include massive investment in renewables and clean technologies, getting the best we can out of energy efficiency, transforming agriculture, and protecting the forest. It sounds simple but of course it’s not. Effecting a transition to a new type of economy involves very difficult trade-offs and choices.

Coal is a case in point. In Poland, for example, 100,000 people work in the mines. What is to happen to them if that industry closes down? Similarly, in political terms, the decision on what happens to coal is a crucial test for German society. Industry and unions will be pitted against the powerful green movement. If measures against coal go ahead in Germany there is every chance something similar will be applied across the EU. Not for the first time, Angela Merkel’s role will be pivotal.

Ireland will not be hugely challenged by the coal issue except perhaps in relation to electricity generation at Moneypoint. Cows will be our biggest challenge. Emissions associated with increased levels of agricultural activity envisaged under the government’s 2020 Food Harvest Plan and the recent abolition of milk quotas pose a threat to achieving emissions targets.

Recommending how to square the circle on policy coherence will be a key task for the new Advisory Council on Climate Change chaired by Prof. John Fitzgerald. The climate change challenge is ultimately global, uncertain, long term and irreversible. Since 2008 we have seen how markets are increasingly dictating the terms under which governments may govern. In other words, political economy has been subordinated to a particular form of market-driven economics. The paradox here is that markets will not drive the transition to a low carbon world because they have no concern for public goods.

That said, markets will respond if states create conditions where it is in their economic interests to do so. The fastest selling luxury car in the US, for example, is the battery powered Telsa that is transforming consumers’ notions of what a car should be.

It’s time for states to reassert their unique leadership. The G7 decision gives us reason to hope.

David Begg is Director of TASC

Mazzucato, Mariana (2013) ‘The Entrepreneurial State: Debunking Public Vs Private Sector Myths.’ London and New York. Anthem Press.
Wolf, Martin (2015) ‘Why Climate Change Uncertainty Justifies Action.’ The Financial Times, 10th  June 2015, p 11.

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