“It is difficult to get a man to understand something,

when his salary depends on his not understanding it.”

― Upton Sinclair

 

According to NASA, 97% of scientists who have studied climate change agree that the world faces a potential disaster, as do the majority of the public worldwide. The Paris Accord seemed to suggest that politicians were also in agreement.

But subsequent developments have called that into question. Donald Trump withdrew the US from the Paris Accord, calling climate change a ‘hoax.’ Many other governments have yet to demonstrate the seriousness of their commitment to the agreement. And in Australia, despite unprecedented fires causing a national emergency, the Prime Minister, Scott Morrison, denies that his government should be doing more on climate change. As he put it,

“We’ll do in Australia what we think is right for Australia. I’m not here to try to impress people overseas… I am not going to write off the jobs of thousands of Australians by walking away from traditional industries.”

Is this lunacy or has he got a point?

Both:

  • It is lunacy to think that ignoring the impact of climate change is affordable, while tackling it is not; but
  • he has got a point that we need to think about the victims of tackling climate change – particularly if they are already struggling; so
  • we don’t just need to think about individual policies, we need to think about policy portfolios which protect the vulnerable.

It is lunacy to think that ignoring the impact of climate change is affordable

Despite the Paris accords, too many politicians seem to view tackling climate change as unaffordable – and, implicitly, allowing it to continue as an acceptable alternative. This is lunacy, since:

  • without active mitigation, we could be looking at global increases in temperature of up to 3°C – or even more;
  • a rise of this scale would ruin billions of lives around the world; and
  • even the purely economic costs would be huge.

Unfettered climate change could cause increases of 3⁰C or even more

According to the UN World Meteorological Organization’s Secretary-General Petteri Taalas,

“Greenhouse gas concentrations are once again at record levels and if the current trend continues, we may see temperature increases 3-5 degrees C by the end of the century. If we exploit all known fossil fuel resources, the temperature rise will be considerably higher.”

Even a 3°C is double the 1.5°C rise envisaged in the Paris accords. And this is the level where the changes may become irreversible.

“Between two and three degrees the Amazon rainforest, whose plants produce 10 per cent of the world’s photosynthesis and have no evolved resistance to fire, may turn to savannah, as drought and mega-fires first destroy the rainforest, turning trees back into carbon dioxide as they burn or rot and decompose [Theor. App. Climatology, 78, 137-56]. The carbon released by the forests destruction will be joined by still more from the world’s soils (see below), together boosting global temperatures by a further 1.5ºC [Nature, 408, 184-7]. It is suggested than in human terms the effect on the planet will be like cutting off oxygen during an asthma attack. A March 2007 conference at Oxford talked about ‘corridors of probability’ with models predicting the risk of the Amazon passing a “tipping point” at between 10 to 40 per cent over the next few decades. The UK’s Hadley Centre climate change model, best known for warning of catastrophic losses of Amazon forest, predicts that, under current levels of greenhouse gas emissions, the chances of such a drought would rise from 5% now (one every 20 years) to 50% by 2030, and to 90% by 2100.

The collapse of the Amazon is part of the reversal of the carbon cycle projected to happen around 3 degrees, a view confirmed by a range of researchers using carbon coupled climate models. Vast amounts of dead vegetation stored in the soil – more than double the entire carbon content of the atmosphere – will be broken down by bacteria as soil warms. The generally accepted estimate is that the soil carbon reservoir contains some 1600 gigatonnes, more than double the entire carbon content of the atmosphere. The conversion will begin of the terestrial carbon sink to a carbon source due to temperature-enhanced soil and plant respiration overcoming CO2-enhanced photosynthesis, resulting in widespread desertification and enhanced feedback [Physics Today, www.aip.org/pt/vol-55/iss-8/p30.html].”

A 3⁰C rise would ruin billions of lives around the world

The impact of warming is not just the rise itself; it has consequences – many of which are already becoming visible – on:

  • frequency of extreme heatwaves;
  • frequency of extreme rainfall;
  • water availability;
  • biodiversity;
  • forest fires;
  • rainforest survival;
  • sea levels;
  • marine ecosystems; and
  • food security.

An Australian Study concluded that a plausible scenario for the impact of a 3°C rise by 2050 included the following:

“Most regions in the world see a significant drop in food production and increasing numbers of extreme weather events, including heat waves, floods and storms. Food production is inadequate to feed the global population and food prices skyrocket, as a consequence of a one-fifth decline in crop yields, a decline in the nutrition content of food crops, a catastrophic decline in insect populations, desertification, monsoon failure and chronic water shortages, and conditions too hot for human habitation in significant food-growing regions. … Even for 2°C of warming, more than a billion people may need to be relocated and In high-end scenarios, the scale of destruction is beyond our capacity to model, with a high likelihood of human civilisation coming to an end.”

Whether, with rising nationalism and hostility to refugees, more than a billion people would be relocated is another question. If not, of course, many of them would simply die.

Even the purely economic costs would be huge

Most economic assessments of climate change are flawed, sometimes for understandable reasons, as Naomi Oreskes and Nicholas Stern wrote in the New York Times,

“Typically, our estimates of the value or cost of something, whether it is a pair of shoes, a loaf of bread or the impact of a hurricane, are based on experience. Statisticians call this ‘stationarity.’ But when conditions change so much that experience is no longer a reliable guide to the future — when stationarity no longer applies — then estimates become more and more uncertain.

Hydrologists have recognized for some time that climate change has undermined stationarity in water management — indeed, they have declared that stationarity is dead. But economists have by and large not recognized that this applies to climate effects across the board. They approach climate damages as minor perturbations around an underlying path of economic growth, and take little account of the fundamental destruction that we might be facing because it is so outside humanity’s experience.

A second difficulty involves parameters that scientists do not feel they can adequately quantify, like the value of biodiversity or the costs of ocean acidification. Research shows that when scientists lack good data for a variable, even if they know it to be salient, they are loath to assign a value out of a fear that they would be ‘making it up.’

Therefore, in many cases, they simply omit it from the model, assessment or discussion. In economic assessments of climate change, some of the largest factors, like thresholds in the climate system, when a tiny change could tip the system catastrophically, and possible limits to the human capacity to adapt, are omitted for this reason. In effect, economists have assigned them a value of zero, when the risks are decidedly not. One example from the report: The melting of Himalayan glaciers and snow will both flood and profoundly affect the water supply of communities in which hundreds of millions of people live, yet this is absent from most economic assessments.”

In other words, though they cannot be estimated accurately, any reasonable assessment of the total economic impact of climate change is far higher than shown in the estimates we have normally seen.

Morrison has got a point that we need to think about the victims of tackling climate change

The consequences described above are so dire that it is tempting simply to brush aside all counterarguments. But this is to ignore the human consequences of action. It is like a mirror image of the climate denialists approach. While it is true that we all have to be prepared to make changes in our lives – some of them, things that we may not wish to change – we must make sure that it is not true that large numbers of people’s lives will be ruined by going green.

And this means careful thought, because:

  • many industries will need to shrink radically; and therefore
  • many jobs will be lost; which means that unless we think things through carefully,
  • many ordinary people will suffer severely.

Many industries need to shrink radically

The source of greenhouse gas emissions is principally the fossil fuel energy industry, as the chart below indicates. The end use of that energy is almost every sphere of human activity.

For the end-use industries, such as road transport or heating for residential buildings, substantial change will be needed – but it is change rather than shrinkage per se. But for the fossil fuel industry, dramatic shrinkage is needed.

Many jobs will be lost

In the US alone, more than 400,000 people are employed in the oil and gas industry and a further 50,000 work in the coal industry. And for everyone employed directly in the industry, there are many others who are in some way dependent on them. Many millions of jobs will be lost; and many more millions will suffer, if we do not take steps to prevent it.

The pain will be felt by many ordinary people

Of course, some of the pain will be borne by extremely wealthy people who can afford it – large shareholders in these fossil fuel companies. But not all the shareholders are large shareholders; many of the employees of and suppliers to the fossil fuel companies are far from wealthy; and the same is true of their customers.

We can already see that asking poorer people to bear the costs of a green transition is not only unfair but ineffective. In France, the protests by the yellow-vests movement, the gilets jaunes, began when rising world oil prices, combined with an increase this year of 7.6 cents per litre in taxes on diesel, pushed prices at the pump up to record highs. President Macron responded by pointing out that, “Those who complain about higher fuel prices also demand action against air pollution because their children get sick.” He was right, in other words, and they were logically inconsistent.

But many people felt that this was yet another sign of his disregard for the concerns of the mass of the population. And the end result was that he was forced to cancel his planned fuel tax rise.

 

We need to think about policy portfolios from which everyone can benefit

So if we are to go green successfully, we need a more intelligent approach than the one adopted by President Macron. In practice, success will require us to:

  • harness the power of the profit motive, rather than attempting to struggle against it;
  • understand that, although policy formulation is complex, there are only four types of policy (see below);
  • use this understanding to construct a portfolio of policies that protects the vulnerable.

We must harness the power of capitalism

As Paul Polman, former CEO of Unilever recently wrote in the Financial Times,

“Most governments are still moving too slowly and the impact of protest has limits. The private sector can either destroy the planet or replenish it.”

He is certainly right that capitalism is an enormously powerful force, but at the moment that force is too often acting in opposition to the necessary changes. As Appendix IX to 99% makes clear, the root of this problem is that companies are rewarded for externalising their costs: polluting the environment without paying for the clean-up; employing workers at below the living wage in the knowledge that the rest of society will pay the difference; avoiding taxes while taking advantage of the infrastructure and investment that the taxes of others have paid for.

In our current system, unethical businesses receive a hidden subsidy from the rest of society, while ethical ones do not. Of course, this tilts the playing field to the advantage of the unethical businesses. A business which externalises its costs becomes a powerful engine for environmental degradation and mass impoverishment.

Fixing climate change without changing the way that businesses are measured and rewarded is like swimming against a powerful tide: it may be impossible.

Once capitalism is cleaned-up, however, and businesses no longer receive this hidden subsidy for polluting the environment or underpaying their staff, all growth becomes good growth. Businesses will be able to grow their profit by going green; they will not be able to increase profit by destroying the environment. That will, quite literally, change the game.

There are four types of policy

What does this mean for policy-makers? The answer is surprisingly simple: first, they need to level the playing field as described above; and secondly, governments should focus policy on growing the pie and sharing it fairly.

Every policy either increases the size of the pie, or it does not; and it either shares the pie fairly for it does not. Although individual policies may be complex, in this framing, there are only four types of policy:

  1. captured growth policies which grow the pie but share it unfairly;
  2. shared growth policies which both grow the pie at a reasonable rate and share it fairly;
  • vulture policies which neither grow the pie nor share it fairly; and
  1. balancing policies which do not grow the pie but improve the fairness of sharing.

Construct a portfolio of policies that protects the vulnerable

Macron failed because his policy was, in effect, a Type I policy – good for the nation, and the world, as a whole but bad for many vulnerable individuals. Had he been using this framework for policy formulation, he might have realised that he needed a Type IV policy to balance it. He could have raised his fuel tax, and simultaneously announced that the proceeds would be paid out has a ‘green dividend’ to the worst off in French society. In the short term, the gilets jaunes would not have been disadvantaged. And in the medium term if they were able to reduce their use of fossil fuels, they would have become better off.

*               *             *

Although tackling climate change inevitably requires enormous readjustment in society, with the right policy portfolio, it can be done without disadvantaging the most vulnerable – and therefore with their support. Once we understand and adjust the payoffs, we can act effectively on climate change. Until then, action may be impossible.

If this matters to you, please do sign up and join the 99% Organisation.