The idea that we should do something about climate change seems sensible enough. Assume that it’s all true – we do have to do that before it’s worth doing anything. But after we’ve agreed to that there comes the question of, well, what is it that we should do?
Around here we argue that we stick a carbon tax on and we’re done. Because the problem is that emissions aren’t included in the price system – externalities – and so if we get them into the price system then we are indeed done. Some find that not a persuasive argument.
It’s also possible to be entirely silly in designing what we should do. As with Colin Hines and Richard Murphy here:
There is no better example of what Larry Elliott perceptively terms “capitalism for dummies”, whereby our political systems self-destructively fail to tackle the climate and biodiversity crisis, than the unspent 95% of the green homes programme (We’re on a collision course with the planet. But with public support, that can change, 10 February).
To reverse this trend, and overcome the social and employment effects of the Covid pandemic, will require a new form of growth – one which only supports an increase in economic activity that improves social conditions, creates secure, adequately paid jobs and seriously addresses the environmental crisis.
That green homes programme has indeed suffered from a problem:
The government’s flagship programme for a green recovery is in turmoil after it was revealed that hundreds of millions of pounds are being withdrawn from its green homes grant programme.
Ninety-five per cent of the £1.5bn pot provided for householders in England to make their homes less carbon intensive remains unspent due to long delays in giving out grants to householders and making payments to installers.
Some householders have been waiting nearly five months for the grants to be approved and installers say they have had to lay off staff because they are owed tens of thousands of pounds by the scheme, which is run by an American global consulting firm, ICF.
We find that we can’t in fact spend the money already allocated. Well, OK, so what should be our solution here? Back to Hines and Murphy:
Just as it appears that the government is beginning to take back control of the NHS from inefficient aspects of private-sector involvement, so the same kind of “smart, activist state” is required to decarbonise and make energy-efficient the UK’s 30m buildings. Such a massive programme providing jobs in every constituency could be paid for by offering green Isas at an interest rate of, say, 1% to attract huge swathes of the £70bn invested in this annually. This programme could be underwritten by green quantitative easing, whereby the Bank of England electronically creates the money involved and no government debt is incurred.
Such a multibillion-pound programme could be rolled out in time to act as a global exemplar for Cop26 in Glasgow this November. “Saving for the planet” is also likely to be extremely popular politically, given the growing public support for tackling the climate crisis.
Richard Murphy Visiting professor of accounting, Sheffield University Management School and Colin Hines Convenor, UK Green New Deal Group
Right. So, we’ve only been able to spend £75 million of the £1.5 billion allocated. The solution is to throw £71 billion at the problem.
anyone else see a problem here?