Fairness will be key to successfully tackling the climate crisis | Larry Elliott

Just as inequality fuelled the pandemic, it could wreck plans to cut emissions

The message from the Intergovernmental Panel on Climate Change could hardly be clearer. Business as usual means global temperatures will rise by more than 1.5C above pre-industrial levels within two decades. Preventing that happening will require a massive and rapid drop in the amount of greenhouse gases being emitted.

Diagnosis is the easy bit. The question is not whether human beings are on a collision course with nature but how to use the time left to bring about the far-reaching economic changes required to avoid catastrophe.

The response to the pandemic has shown what’s possible in an emergency. Governments hit the panic button as hospitals filled up with Covid-19 patients. A combination of private and public sector action brought forward vaccines much more speedily than anybody could have imagined in the early months of 2020. Finance ministries in rich countries spent freely to prevent a medical crisis becoming an economic and social crisis. The imperative was to save lives, not balance budgets.

But it would be unwise to assume the response to the two crises will be exactly the same. Governments reacted to Covid-19 by imposing restrictions on personal freedom unprecedented in peacetime. In theory Boris Johnson, Emmanuel Macron or Mario Draghi could insist that a new range of curbs are needed in a war against climate change. In reality, they will be wary of going down the compulsion route, not least because the experience of the pandemic is that there is only so much the public will tolerate. Lockdowns work for a while, but then people chafe at the restrictions. Telling them they have to stop doing things they enjoy – foreign travel, for example – will be a last resort for politicians. July was Heathrow’s busiest month since the start of the pandemic.

Britain, France and Italy each account for about 1% of greenhouse gas emissions, and it seems unlikely that they will insist on their citizens making sacrifices that are not matched by those in other countries. The yellow vest fuel protesters have already shown Macron how unpopular action to tackle climate change can be.

What’s true for democracies is true for autocracies as well. China is by far the world’s biggest polluter, accounting for 28% of global emissions, but its rapid economic growth and political stability has relied on migration from the fields to the factories, where people earn more and owning a car is a symbol of success. So while the Chinese Communist party is aware of the risks of climate change and is investing heavily in renewables, it also fears slower growth will lead to higher unemployment and political discontent. Hence China is building new coal-fired power plants at the same time as it is home to nearly half the world’s electric passenger vehicles and one in three of the world’s solar panels.

Most African countries are at an earlier stage of development than China and for them growth is not a luxury but the means to tackle hunger and infant mortality. Johnson won’t get very far at the November Cop26 conference in Glasgow telling poor people that they will have to make sacrifices in order to save the planet, especially in light of the decision to cut Britain’s aid budget.

It is not going to be easy to replicate the urgency with which countries responded to the pandemic. Despite the floods and the forest fires, there is always a temptation for politicians to put off tough decisions in the belief that they have more time to act. Rishi Sunak is cavilling at the upfront costs of hitting the UK government’s net zero target. Nor does Keir Starmer’s £30bn green investment plan match the scale of the challenge.

The lesson of the past is that smart people can come up with solutions to seemingly intractable problems given the right incentives. Putting economies on a climate-war footing would accelerate technological change, replicating what happened between 1939 and 45, a period that saw advances in the use of flu vaccines, jet engines, computers and blood plasma transfusions.

For that to happen there needs to be a different sort of political economy, based around redistribution, taxing pollution rather than jobs, investment in innovation, and cooperation between countries. Donald Trump would never have bought into this agenda, but Joe Biden might.

Glasgow will be a test of political will. The commitments made in Paris six years ago are consistent with temperatures rising by 3C, and need to be strengthened. A sign of multilateral intent would be plans for a steadily rising carbon tax, the phasing out of fossil-fuel subsidies and the naming and shaming of the most significant greenhouse gas emitters.

Inequality, both within and between countries, remains the most serious impediment to tackling climate change and progress will be slower unless it is addressed. The architects of the New Deal in the 1930s understood that responding to the Great Depression was not just about spending money on public works and providing jobs for the unemployed; it was also about giving more power to organised labour, curbing Wall Street and imposing higher taxes on the rich. The New Deal was merely part of a package that included full employment and the US decision to fend off the threat of communism in western Europe through the redistributive mechanism of Marshall aid.

Updating the New Deal for the modern age requires a green dimension. It also needs a social dimension to ensure buy-in from the low-paid people and those likely to lose their jobs in the inevitable low-carbon shakeout. If governments want people to switch from gas boilers to heat pumps they are going to have to foot the bill. If they want poor countries to skip the fossil-fuel phase and move straight to energy systems based on renewables, they are going to have to come up with a modern version of the Marshall plan. Building back greener means building back fairer.

  • Larry Elliott is the Guardian’s economics editor

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Larry Elliott

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