If the cap fits, share it

Instead of setting up a new currency in carbon, cap and share utilises the oldest rationing system i

It is strange how little British people know about what goes on in Ireland. The Irish government is just a few months away from introducing a scheme to tackle greenhouse-gas emissions which is revolutionary in its ambition and scope, and could be extraordinarily important as a model for the rest of the world. Yet no one here has heard anything about it. A search I conducted on a news database returned a grand total of zero documents.

Ireland's energy and environment ministers are both Greens, governing in coalition with the more traditional Fianna Fáil party. The Green Party's condition for entering the coalition was a climate-change bill - imported, as is often the custom, from the UK. This bill will be passed soon but, like us, Ireland at present has no coherent programme for actually getting the cuts in carbon emissions that the new legislation will mandate. Except that now the Irish may have invented just the tool for the job. It is called "cap and share". Remember the phrase - you could soon be hearing much more about it.

In previous issues of this magazine, I have argued strongly in favour of carbon rationing, under which every adult citizen would get a share of the country's carbon allowance to "spend" on fossil-fuelled things such as flights, heating and petrol. The idea is radical, and - with its wartime connotations - evokes images of shared sacrifice in the face of a great emergency. However, it would not be easy to implement: because carbon rations would have to be tradable in order to be economically efficient, the government would need to set up and police 48 million carbon accounts. This presents privacy as well as administrative problems. It also establishes carbon as a kind of parallel currency: people who are over their ration limit (or have already sold their share) would have to buy carbon at market prices in order to purchase fuel. We would, in effect, need to become a nation of carbon currency speculators - quite a tall order, when most people can barely even manage their mortgage.

This is where cap and share comes in. The proposal being considered by the Irish government - and likely to be announced in December's budget - takes a very different angle. Carbon permits are created not to regulate individual consumption, but to share among all adult citizens the revenue generated from carbon trading. In order to sell petrol, a company such as Shell would need to have sufficient permits. It would need to buy these from Irish citizens, who would then find themselves receiving £100 or more in the post in order to offset rising prices at the pump.

As Richard Douthwaite, an ecological economist who sits on the council advising the Irish government about the system, explains: "Cap and share is a way of upping the price of fossil fuels and recycling the money to citizens. It is rationing at the top level rather than at the level of individuals."

So, instead of setting up a new currency in carbon, cap and share utilises the oldest rationing system in the book: the price mechanism. You don't need a carbon credit card; petrol will still be bought and sold in plain old money. But the price will go up, because petrol entering the economy will be restricted in line with the legally established need to reduce greenhouse-gas emissions. Instead of going to the companies or the government, however, the extra revenue from these higher prices will be going back to ordinary consumers. The higher price establishes a clear incentive for people to adopt low-carbon lifestyles, while ensuring that the poor are not disadvantaged and that the rich - who tend to have higher emissions - pay more.

Cap and share would not cover the whole economy. The current Irish proposal is for only the road transport sector to be included at the initial stage. Nor need it regulate industrial emissions, which are covered by the European Union's Emissions Trading Scheme. Because of the ETS, cap and share need only cover those instances where consumers buy fossil fuels directly, generally for either domestic heating or transport.

If the cap and share scheme is duly implemented, Ireland will have invented an ingenious way of restricting greenhouse-gas emissions with a minimum of pain and fuss. Most people may even find themselves better off. Here in the UK, even though we, too, have a climate bill going through parliament, there is little sign from the government of coherent thinking about how any of it will actually be implemented. I suggest a trip to Dublin - by ferry, of course.

Mark Lynas has is an environmental activist and a climate change specialist. His books on the subject include High Tide: News from a warming world and Six Degree: Our future on a hotter planet.

This article first appeared in the 04 February 2008 issue of the New Statesman, God

David Young
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The Tories are the zombie party: with an ageing, falling membership, still they stagger on to victory

One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.”

All football clubs have “ultras” – and, increasingly, political parties do, too: although, in the case of political parties, their loudest and angriest supporters are mostly found on the internet. The SNP got there first: in the early days of email, journalists at the Scotsman used to receive bilious missives complaining about its coverage – or, on occasion, lack of coverage – of what the Scottish National Party was up to. The rest soon followed, with Ukip, the Labour Party and even the crushed Liberal Democrats now boasting a furious electronic horde.

The exception is the Conservative Party. Britain’s table-topping team might have its first majority in 18 years and is widely expected in Westminster to remain in power for another decade. But it doesn’t have any fans. The party’s conference in Manchester, like Labour’s in Brighton, will be full to bursting. But where the Labour shindig is chock-full of members, trade unionists and hangers-on from the charitable sector, the Conservative gathering is a more corporate affair: at the fringes I attended last year, lobbyists outnumbered members by four to one. At one, the journalist Peter Oborne demanded to know how many people in the room were party members. It was standing room only – but just four people put their hands up.

During Grant Shapps’s stint at Conservative headquarters, serious attempts were made to revive membership. Shapps, a figure who is underrated because of his online blunders, and his co-chair Andrew Feldman were able to reverse some of the decline, but they were running just to stand still. Some of the biggest increases in membership came in urban centres where the Tories are not in contention to win a seat.

All this made the 2015 election win the triumph of a husk. A party with a membership in long-term and perhaps irreversible decline, which in many seats had no activists at all, delivered crushing defeats to its opponents across England and Wales.

Like José Mourinho’s sides, which, he once boasted, won “without the ball”, the Conservatives won without members. In Cumbria the party had no ground campaign and two paper candidates. But letters written by the Defence Secretary, Michael Fallon, were posted to every household where someone was employed making Trident submarines, warning that their jobs would be under threat under a Labour government. This helped the Tories come close to taking out both Labour MPs, John Woodcock in Barrow and Furness and Jamie Reed in Copeland. It was no small feat: Labour has held Barrow since 1992 and has won Copeland at every election it has fought.

The Tories have become the zombies of British politics: still moving though dead from the neck down. And not only moving, but thriving. One Labour MP in Brighton spotted a baby in a red Babygro and said to me: “There’s our next [Labour] prime minister.” His Conservative counterparts also believe that their rivals are out of power for at least a decade.

Yet there are more threats to the zombie Tories than commonly believed. The European referendum will cause endless trouble for their whips over the coming years. And for all there’s a spring in the Conservative step at the moment, the party has a majority of only 12 in the Commons. Parliamentary defeats could easily become commonplace. But now that Labour has elected Jeremy Corbyn – either a more consensual or a more chaotic leader than his predecessors, depending on your perspective – division within parties will become a feature, rather than a quirk, at Westminster. There will be “splits” aplenty on both sides of the House.

The bigger threat to Tory hegemony is the spending cuts to come, and the still vulnerable state of the British economy. In the last parliament, George Osborne’s cuts fell predominantly on the poorest and those working in the public sector. They were accompanied by an extravagant outlay to affluent retirees. As my colleague Helen Lewis wrote last week, over the next five years, cuts will fall on the sharp-elbowed middle classes, not just the vulnerable. Reductions in tax credits, so popular among voters in the abstract, may prove just as toxic as the poll tax and the abolition of the 10p bottom income-tax rate – both of which were popular until they were actually implemented.

Added to that, the British economy has what the economist Stephen King calls “the Titanic problem”: a surplus of icebergs, a deficit of lifeboats. Many of the levers used by Gordon Brown and Mervyn King in the last recession are not available to David Cameron and the chief of the Bank of England, Mark Carney: debt-funded fiscal stimulus is off the table because the public finances are already in the red. Interest rates are already at rock bottom.

Yet against that grim backdrop, the Conservatives retain the two trump cards that allowed them to win in May: questions about Labour’s economic competence, and the personal allure of David Cameron. The public is still convinced that the cuts are the result of “the mess” left by Labour, however unfair that charge may be. If a second crisis strikes, it could still be the Tories who feel the benefit, if they can convince voters that the poor state of the finances is still the result of New Labour excess rather than Cameroon failure.

As for Cameron, in 2015 it was his lead over Ed Miliband as Britons’ preferred prime minister that helped the Conservatives over the line. This time, it is his withdrawal from politics which could hand the Tories a victory even if the economy tanks or cuts become widely unpopular. He could absorb the hatred for the failures and the U-turns, and then hand over to a fresher face. Nicky Morgan or a Sajid Javid, say, could yet repeat John Major’s trick in 1992, breathing life into a seemingly doomed Conservative project. For Labour, the Tory zombie remains frustratingly lively. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.

This article first appeared in the 01 October 2015 issue of the New Statesman, The Tory tide