2023 was a year of extreme weather events, and a year which saw an increase in global temperature larger than any in a dataset that goes back 144 years. Opinion polling shows that almost two thirds of Britons are worried about climate change, but that only just over one third of them think that spending on climate change should be a priority now. Over the past 13 years of Austerity, most Britons have consistently chosen the Economy as the most important issue facing the country. It is understandable, then, that both Labour and the Conservatives seem willing to downplay the climate and ecological emergency, and to focus instead on growing the economy. But this is a false dichotomy, based on a profound misunderstanding of both ecological and economic reality.
Denying ecological reality
It is, at last, now widely recognised that humanity is already, or perilously close to, crossing key planetary boundaries. Global heating is the most urgent challenge, but not the only one. The temptation to tackle global heating in a way that impinges as little as possible on our way of life ignores how this might impact other planetary boundaries, particularly biodiversity.‘Net zero’ has become the concept of choice for politicians seeking to address the climate crisis while preserving an economic system based on profits and growth. It encourages them to believe that economic growth can continue unabated, and that rapid replacement of fossil fuels with low-carbon energy will, if coupled with removal of CO2 from the atmosphere (Negative Emissions Technologies), limit global temperature increases to tolerable levels.
Net Zero is a framing that claims to acknowledge the reality of climate change, but ignores the reality of what would actually be needed to halt the rise in global temperatures. Global temperatures stop rising when we no longer put more greenhouse gases into the atmosphere than we take out. How much the temperature will rise depends on how much we allow the concentration of greenhouse gases in the atmosphere to rise, before Net Zero is achieved.
Whether or not aiming for ‘Net Zero by 2050’ limits global temperature rise to 1.5°C or 2°C depends on how quickly emissions are reduced. Having a target that is more than a quarter century away allows politicians to postpone effective action, a complacency that is encouraged by faith in a technological change (Net Emissions Technology) that doesn’t exist yet. The longer effective action is postponed, the higher the temperature will rise, and the greater will be the resulting disruption.
Relying on something that may or may not be possible, at the scale that would be required, ignores the urgency of the climate crisis. Relying instead on accelerating the rate of decarbonisation would ignore the time it would take to access, mine and process the critical metals and minerals (lithium, cobalt etc) that would be needed, and the biodiversity damage that would result.
Something has to give. Unless we condemn future generations to climate catastrophe, that something has to be economic growth. Stopping growth (except in poor countries of the global South, where it is still needed to meet basic needs) would lessen pressures on the living planet, and make decarbonisation easier to achieve within the available timescale.
The main political parties in the UK aim to achieve ‘Net Zero by 2050’ (a target that bears little relation to the professed aim of limiting global temperatures to 1.5°C above pre-industrial levels). The Conservatives are committed to licensing new oil and gas production in the North Sea (a clear breach of its climate commitments that does nothing to reduce fuel bills or improve energy security). Labour insists that meeting its promise to spend £28 billion each year on a ‘green prosperity plan’ depends on its ability to reduce national debt as a proportion of GDP, and there are now suggestions that the plan may be abandoned completely. Both parties are committed to economic growth as a key objective, and ask voters to judge them on how successful they are in meeting it.
Denying economic reality
Mainstream economics takes little account of natural limits to economic growth, and it sees economic growth as being essential to improving human wellbeing. In the real world, though, respecting natural limits and continuing to pursue economic growth are incompatible.
From this, it might appear that if we are to respect planetary boundaries, popular concerns about the cost of living could not be addressed. That is only the case, however, in an economic system that depends on continued economic growth. There is an alternative, sometimes termed degrowth, which entails restraining the incomes and consumption of the rich, and meeting the needs of the poor.
“To stop biodiversity loss and to equitably limit global warming to 1.5°C without relying on highly contested assumptions about future technologies, affluent countries need to reduce their production and consumption … It is not output reductions but the vulnerability to output reductions that can and should be precluded .”
(J Vogel et al, Safeguarding livelihoods against reductions in economic output, Ecological Economics Jan 2024)
Economic growth was never the guarantee of wellbeing that mainstream economics pretended it was. The benefits go initially to the rich, and whatever small proportion trickles down to the less well off does so after a considerable time lag. For people on low incomes, a rise in income improves wellbeing. For people on higher incomes, it is less straightforward - many of them experience an unhappiness that is not alleviated by a further rise in income.
Curbing the lifestyles of the rich would not only make it easier to sustain the living standards of the poor, it would contribute massively to the reduction of carbon emissions need to stabilise the climate. The contribution of the world’s richest individuals to global heating is staggering. Recent research carried out by the Stockholm Environment Institute for Oxfam suggests that the richest 1% of the world’s population have, over the past quarter century, emitted more than twice the carbon that was emitted by the poorest 50%.
Voters are understandably suspicious of anything that smacks of austerity. As a result of austerity policies adopted by Coalition and Conservative governments in the UK over the past thirteen years, the real incomes of most employees have not risen at all, and public support for the most vulnerable has been slashed. Yet incomes of the rich, and inequalities of wealth, have increased.
The main argument put forward to justify austerity in 2010 was a perceived need to reduce national debt as a share of national income. It’s a ‘need’ that is repeated, by both Conservatives and Labour, in their 2024 election pledges as a reason for giving priority in economic policy to balancing the books. This fixation on reducing national debt is rooted in a widespread, but probably deliberate, misunderstanding of the nature of ‘national debt’. Unlike private debt, public debt does not have to be repaid. it is simply rolled over. Much of what is included in the national debt is not actually debt but money ‘owed’ by one part of government to another. And much of what remains is a secure home for either private savings (National Savings) or pensions (gilt-edged securities). As tax expert Richard Murphy has explained, “the obsession with national debt is crazy”.
Clara Mattei’s groundbreaking study of austerity programmes in the UK and Italy, The Capital Order (2023), suggests that framing austerity as a technique of budget management is a smokescreen. What this framing hides, she suggests, is a deliberate intent to redistribute income from labour to capital, and to protect an economic system that is driven by profit rather than need.
Mattei’s book starts with an examination of two international conferences held after the First World War, at Brussels in 1920 and Genoa in 1922. Here the need for austerity as a set of technocratic policies that could disempower political movements seeking a more just economic system was explicit. Over and over again, conference delegates stressed the need to educate the public that “all superfluous expenditure should be avoided” , to challenge their “dream of false hopes and illusions”, and to install in them “the recognition of hard facts.”
“Nearly every Government is being pressed to incur fresh expenditure largely on palliatives which aggravate the very evils against which they are directed . The first step is to bring public opinion in every country to realise the essential facts of the situation and particularly the need for re-establishing public finances on a sound basis as a preliminary to the execution of those social reforms which the world demands.”
(Commission on Public Finance resolution to the 1920 Brussels conference, quoted in Clara Mattei, The Capital Order, 2023)
These sentiments are echoed in Labour’s current insistence that it will ‘balance the books’, reduce national debt, and not increase the tax burden, and in Conservative claims that only they will be able to actually balance the books, reduce national debt, and cut taxes.
Austerity does not have to mean misery for the many and benefits for the few. The post Second World War Labour government embarked on an austerity programme, dictated by a need to prioritise the exports that were needed, under the fixed exchange rate regime of the time, to pay for the imported materials that post-war reconstruction required. Living standards for the poor were protected by a continuation of wartime rationing and food subsidies, and by establishing the National Health Service and extending the Welfare State. The burden of increased taxation fell mainly on the well-off, with marginal tax rates on high incomes reaching 98%, and at one stage, where high levels of unearned incomes were involved, exceeding 100%.
If degrowth to meet basic needs while protecting planetary boundaries is to succeed, it will need, like the Labour Government of 1945, to curb the incomes and consumption patterns of the rich. This would eliminate some of the most carbon intensive activities of the rich, like frequent flying in private jets, and it would free resources for investing in decarbonisation and supporting basic needs of the less well off. But degrowth would not work if it was just another technical fix - it would have to be implemented sensitively. If environmental protection measures fail to address the concerns of people whose livelihoods are adversely affected, this creates unnecessary and avoidable opposition, which can jeopardise what the measures aim to achieve. Recent proposals to decarbonise steel production in South Wales and to cut diesel subsidies for farmers in Germany are cases in point.
Above all, effective degrowth would require a culture shift that allowed us to get more satisfaction from living in harmony with each other and with nature than from consuming goods that we don’t need.
In the end, the growth economy is a relatively recent human construct. It can be changed. The laws of nature, however, cannot. It would be tragic to continue to perpetuate a mass extinction event because we aren’t brave enough to challenge the insane notion of endless growth on a finite planet with the urgency it deserves.
(Erin Remblance, Growth has us on the edge of collapse. Substack Sep 2023)
Will humanity change course? I’m sure it can, but it won’t happen as an outcome of this year’s elections. Can we change course before it’s too late? I hope so, but I’m not holding my breath.