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Drastic and immediate cuts in carbon emissions, as advocated by most of the green lobby, are an expe

There is a disturbing tendency among many in the climate debate today to deride as "deniers" anyone who does not advocate making huge and immediate carbon cuts. The framing began nearly a decade ago with discussions about the science of climate change. People who questioned the link between carbon emissions and warming were branded "deniers".

The semantic similarity to Holocaust denial was made overt when several prominent environmental campaigners suggested a need for Nuremberg-style trials for their opponents. Such rhetoric was deeply unfortunate. However, one could at least argue that the resulting fiery debate achieved one positive thing: it played a role in rousing most climate scientists to join together to underscore the message that global warming is largely man-made.

We have long since moved on from any mainstream disagreements about the science of global warming. Now, the crucial conversation is about the economics of our response. Today, the labels "denier" and "sceptic" are hurled at anyone who does not fervently argue for drastic, immediate carbon cuts. There is no possible justification, given that so many climate economists - the specialists in this field - recommend very different policies from those being advocated by the zealous carbon cut lobbyists.

In my book, first published in Danish in 1998, and then in English as The Skeptical Environmentalist in 2001, I wrote that man-made global warming exists. I could not have been clearer; the introduction to the section on climate change states: "This chapter accepts the reality of man-made global warming." My position has not changed. Thus, when I am labelled a "long-time climate sceptic" or "climate change denier" by
bloggers and activists, it is not based on any suggestion I have ever declared that the science of global warming is wrong. Rather, it is the campaigners' heated response to my pointing out that drastic carbon cuts don't make sense and that smarter policy responses should be considered.

It is understandable that emotions run high in such a defining discussion. I can appreciate, even in those who disagree with me, a moral intent to do good for humanity. But I cannot see how responding to empirical economics with slander will ever be helpful. Much worse than that, I believe that ignoring - or, indeed, denying - basic economic reality is a shoddy way of helping the planet.

In July, the G8 agreed to make carbon emission cuts to limit global warming to no more than 2°C above pre-industrial levels. This would be the most costly public policy humanity has ever enacted.

The Copenhagen Consensus Centre recently asked top climate economists to explore the benefits and costs of different responses to global warming, to prompt a discussion about the solutions that would have the biggest impact on climate for the lowest cost. We convened a second stellar group of top economists, including three Nobel laureates, to examine independently all of the research and rank the proposals in order of desirability.

One research author, the prominent climate economist Professor Richard Tol, who has been a contributing, lead, principal and convening author for the IPCC, strikingly showed that grand promises of drastic, immediate carbon cuts are a hugely expensive way of doing very little good. Reducing emissions by 80 per cent by mid-century (to achieve the 2°C goal) would avert much of the expected damage of global warming; based on conventional estimates, it would avoid climate damages of about £1.9trn a year by 2100. However, the cost of this would be a reduction in growth - particularly damaging to the world's poor - to the tune of around £25trn a year. Moreover, the costs would come much sooner than the benefits. Every pound spent on this grand plan would achieve twopence worth of good.

Put starkly: drastic carbon cuts would hurt much more than climate change. Cutting carbon is extremely expensive, especially in the short term, because the alternatives to fossil fuels are few and costly. Without feasible alternatives, we just hurt growth, which would be especially damaging for countries such as Brazil, China and India, dependent on fossil fuels to lift millions out of poverty.

It is important to emphasise that Tol's figures are based on projections from all the major economic energy models of the Stanford Energy Modelling Forum. Around half of the models found it impossible to achieve the target of keeping temperature rises lower than 2°C with carbon cuts. The £25trn price tag is optimistic because it comes only from the models that project the target is even possible.

The cost assumes that politicians everywhere in the world would, throughout the entire century, make the most effective, efficient choices possible to reduce carbon emissions. Dump that far-fetched assumption and the cost could be ten or even 100 times higher.

The Copenhagen Consensus on Climate's expert panel considered Tol's research - along with other proposals for responses to global warming - and concluded that drastic carbon cuts would be the poorest approach. The economic lessons are underpinned by real-world experience. In Rio de Janeiro in 1992, politicians from wealthy countries promised to cut emissions by 2000, but did no such thing. In Kyoto in 1997, leaders promised even stricter reductions by 2010, yet emissions have kept increasing unabated. It is little wonder that politicians are backing away from promising that they will be able to broker a new deal on carbon cuts in Copenhagen this December.

Despite the shambles of the Copenhagen negotiations, many carbon cut campaigners refuse to discuss alternative approaches. By dismissing critics as "deniers" and "sceptics", they commit the planet to the poorest policy choice - and one with very little chance of succeeding in controlling temperature rises. We could and should do better. The expert panel of Nobel laureate economists, working for the Copenhagen Consensus on Climate, revealed smarter solutions.

The panel recommended immediate research into climate engineering technology and a substantial increase in research and development of green energy alternatives. The two approaches complement each other. Climate engineering has the advantage of speed. There is a significant delay between carbon cuts and any temperature drop - even halving global emissions by mid-century would barely be measurable by the end of the century. And making green energy cheap and prevalent will also take a long time. After all, electrification of the global economy is still incomplete after more than a century of effort.

Climate engineering has a lot of potential as a way for us to buy more time - but it does not appear to be a long-term answer. We could gain time to ensure that we can shift sustainably and efficiently away from reliance on fossil fuels, which requires the investment in researching alternatives to these fuels.

Many of us fear climate engineering. But the groundbreaking research paper by Eric Bickel and Lee Lane at the University of Texas - one of the first studies of the costs and benefits of these technologies - offers compelling evidence that a tiny investment in climate engineering might be able to reduce as much of global warming's effects as trillions of pounds spent on carbon emission reductions.

The most attractive technology Bickel and Lane examine appears to be marine cloud whitening, where boats spray seawater drop-lets into clouds at sea to make them whiter and thus reflect more sunlight back into space, so reducing warming. This augments the natural process whereby sea salt from the ocean is whipped up and provides cloud condensation nuclei. Marine cloud whitening would not lead to permanent atmospheric changes, and could be used only when needed.

The researchers conclude, remarkably, that we might be able to cancel out this century's entire global warming with 1,900 unmanned ships spraying seawater mist into the air, at a total cost of about £6bn. When the benefits from averted warming are calculated, this is the equivalent of doing more than £2,000 worth of good with every pound spent.

President Barack Obama's science adviser, John Holdren, has said that climate engineering has "got to be looked at", and many prominent scientists agree. Concerns about the ramifications of this technology are a reason to research now to identify all of the limitations and risks. If it turns out that this is not a feasible or sensible approach, we need to have that information as soon as possible.

Marine cloud whitening would obviously not solve every aspect of global warming. But it would achieve more, much faster, than any plausible carbon cuts could ever do, and at a fraction of the price. If we are concerned with solving global warming, then we have a moral obligation to research what we could achieve with this technology.

But there is no point in using climate engineering to buy more time if we do not use it effectively. Since politicians started negotiating carbon agreements, we have wasted nearly 20 years without making any significant progress in reducing global warming. Focusing primarily on how much carbon to try to cut through taxes, rather than on how to achieve this technologically, puts the cart before the horse.

Global energy demand will double by 2050, according to research by the respected climate change economists Chris Green and Isabel Galiana from McGill University in Montreal. Use of fossil fuels remains vital for our development, prosperity and survival. Alternative sources of energy are unfortunately far from ready for widespread use. Green and Galiana show that, to reduce carbon emissions by three-quarters by 2100 while maintaining reasonable growth (a less ambitious goal than the G8's), non-fossil-fuel-based sources of energy will have to be an astonishing two and a half times greater in 2100 than the total level of global energy consumption in 2000.

If we continue on our current path, technological development will not be anywhere near significant enough to make non-carbon-based energy sources competitive with fossil fuels on price and effectiveness. Green and Galiana examine the state of non-carbon-based energy today - nuclear, wind, solar, geothermal, etc - and find that, taken together, alternative energy sources would get us less than halfway towards a path of stable carbon emissions by 2050, and only a tiny fraction of the way towards stabilisation by 2100. The technology will not be ready in terms of scalability or stability. In many cases, there is still a need for the most basic research and development. We are not even close to getting this revolution started.

Current technology is so inefficient that we would have to blanket most countries with wind turbines to power everybody's needs, and even then we would have the problem of storage when the wind doesn't blow.

Many environmental campaigners lauded China's ambition to create "green cities", powered by huge wind farms. But China plans to build dozens of new coal-fired power plants for these cities, too: otherwise, there will be blackouts every time there is not enough wind. The vast majority of Chinese cities will still rely on electricity from coal.

If governments try to cut carbon through taxes and trading schemes without effective replacements, we will make virtually no difference to climate change in the future, while in the shorter term there will be significant damage to economic growth.

Public funds on research and development also need to increase dramatically. We cannot rely on private enterprise alone. As with medical research, early innovations will not reap significant financial rewards, so there is no strong incentive for private investment today. While many of us assume that green research and development must have increased dramatically over the past decade, the actual numbers from the International Energy Agency show that not only has this spending not risen, but it has actually declined significantly since the early 1980s.

Policymakers should abandon fraught carbon reduction negotiations and instead make agreements to invest in research and development to get this technology to the level it needs to be. Provided that this spending doesn't go into subsidising existing, inefficient technology, but is instead put towards promoting innovation, this would have a far greater chance of tackling climate change - and a far greater chance of political success.

The biggest carbon emitters of the 21st century, including India and China, are understandably unwilling to sign up to tough, costly emission targets. They would be much more likely to embrace a cheaper, smarter and more beneficial path of innovation. Ultimately, we will not succeed politically or economically in tackling climate change by making fossil fuels so expensive that nobody will use them. However, if we forge onwards with dramatically increased research and development, towards the middle of the century we could make green energy so cheap that everyone will use it.

Discussions about solving the planet's problems will always be emotional. But they should also be reasoned. The most reasonable response to global warming is to change our course and focus on an approach that would actually work.

Bjørn Lomborg is the director of the think tank the Copenhagen Consensus Centre at Copenhagen Business School and the author of "Cool It: the Skeptical Environmentalist's Guide to Global Warming"

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This article first appeared in the 23 November 2009 issue of the New Statesman, Green Heroes and Villains

Jeremy Corbyn. Photo: Getty
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Lexit: the EU is a neoliberal project, so let's do something different when we leave it

Brexit affords the British left a historic opportunity for a decisive break with EU market liberalism.

The Brexit vote to leave the European Union has many parents, but "Lexit" – the argument for exiting the EU from the left – remains an orphan. A third of Labour voters backed Leave, but they did so without any significant leadership from the Labour Party. Left-of-centre votes proved decisive in determining the outcome of a referendum that was otherwise framed, shaped, and presented almost exclusively by the right. A proper left discussion of the issues has been, if not entirely absent, then decidedly marginal – part of a more general malaise when it comes to developing left alternatives that has begun to be corrected only recently, under Jeremy Corbyn and John McDonnell.

Ceding Brexit to the right was very nearly the most serious strategic mistake by the British left since the ‘70s. Under successive leaders Labour became so incorporated into the ideology of Europeanism as to preclude any clear-eyed critical analysis of the actually existing EU as a regulatory and trade regime pursuing deep economic integration. The same political journey that carried Labour into its technocratic embrace of the EU also resulted in the abandonment of any form of distinctive economics separate from the orthodoxies of market liberalism.

It’s been astounding to witness so many left-wingers, in meltdown over Brexit, resort to parroting liberal economics. Thus we hear that factor mobility isn’t about labour arbitrage, that public services aren’t under pressure, that we must prioritise foreign direct investment and trade. It’s little wonder Labour became so detached from its base. Such claims do not match the lived experience of ordinary people in regions of the country devastated by deindustrialisation and disinvestment.

Nor should concerns about wage stagnation and bargaining power be met with finger-wagging accusations of racism, as if the manner in which capitalism pits workers against each other hasn’t long been understood. Instead, we should be offering real solutions – including a willingness to rethink capital mobility and trade. This places us in direct conflict with the constitutionalised neoliberalism of the EU.

Only the political savvy of the leadership has enabled Labour to recover from its disastrous positioning post-referendum. Incredibly, what seemed an unbeatable electoral bloc around Theresa May has been deftly prized apart in the course of an extraordinary General Election campaign. To consolidate the political project they have initiated, Corbyn and McDonnell must now follow through with a truly radical economic programme. The place to look for inspiration is precisely the range of instruments and policy options discouraged or outright forbidden by the EU.

A neoliberal project

The fact that right-wing arguments for Leave predominated during the referendum says far more about today’s left than it does about the European Union. There has been a great deal of myth-making concerning the latter –much of it funded, directly or indirectly, by the EU itself.

From its inception, the EU has been a top-down project driven by political and administrative elites, "a protected sphere", in the judgment of the late Peter Mair, "in which policy-making can evade the constraints imposed by representative democracy". To complain about the EU’s "democratic deficit" is to have misunderstood its purpose. The main thrust of European economic policy has been to extend and deepen the market through liberalisation, privatisation, and flexiblisation, subordinating employment and social protection to goals of low inflation, debt reduction, and increased competitiveness.

Prospects for Keynesian reflationary policies, or even for pan-European economic planning – never great – soon gave way to more Hayekian conceptions. Hayek’s original insight, in The Economic Conditions of Interstate Federalism, was that free movement of capital, goods, and labour – a "single market" – among a federation of nations would severely and necessarily restrict the economic policy space available to individual members. Pro-European socialists, whose aim had been to acquire new supranational options for the regulation of capital, found themselves surrendering the tools they already possessed at home. The national road to socialism, or even to social democracy, was closed.

The direction of travel has been singular and unrelenting. To take one example, workers’ rights – a supposed EU strength – are steadily being eroded, as can be seen in landmark judgments by the European Court of Justice (ECJ) in the Viking and Laval cases, among others. In both instances, workers attempting to strike in protest at plans to replace workers from one EU country with lower-wage workers from another, were told their right to strike could not infringe upon the "four freedoms" – free movement of capital, labour, goods, and services – established by the treaties.

More broadly, on trade, financial regulation, state aid, government purchasing, public service delivery, and more, any attempt to create a different kind of economy from inside the EU has largely been forestalled by competition policy or single market regulation.

A new political economy

Given that the UK will soon be escaping the EU, what opportunities might this afford? Three policy directions immediately stand out: public ownership, industrial strategy, and procurement. In each case, EU regulation previously stood in the way of promising left strategies. In each case, the political and economic returns from bold departures from neoliberal orthodoxy after Brexit could be substantial.

While not banned outright by EU law, public ownership is severely discouraged and disadvantaged by it. ECJ interpretation of Article 106 of the Treaty on the Functioning of the European Union (TFEU) has steadily eroded public ownership options. "The ECJ", argues law professor Danny Nicol, "appears to have constructed a one-way street in favour of private-sector provision: nationalised services are prima facie suspect and must be analysed for their necessity". Sure enough, the EU has been a significant driver of privatisation, functioning like a ratchet. It’s much easier for a member state to pursue the liberalisation of sectors than to secure their (re)nationalisation. Article 59 (TFEU) specifically allows the European Council and Parliament to liberalise services. Since the ‘80s, there have been single market programmes in energy, transport, postal services, telecommunications, education, and health.

Britain has long been an extreme outlier on privatisation, responsible for 40 per cent of the total assets privatised across the OECD between 1980 and 1996. Today, however, increasing inequality, poverty, environmental degradation and the general sense of an impoverished public sphere are leading to growing calls for renewed public ownership (albeit in new, more democratic forms). Soon to be free of EU constraints, it’s time to explore an expanded and fundamentally reimagined UK public sector.

Next, Britain’s industrial production has been virtually flat since the late 1990s, with a yawning trade deficit in industrial goods. Any serious industrial strategy to address the structural weaknesses of UK manufacturing will rely on "state aid" – the nurturing of a next generation of companies through grants, interest and tax relief, guarantees, government holdings, and the provision of goods and services on a preferential basis.

Article 107 TFEU allows for state aid only if it is compatible with the internal market and does not distort competition, laying out the specific circumstances in which it could be lawful. Whether or not state aid meets these criteria is at the sole discretion of the Commission – and courts in member states are obligated to enforce the commission’s decisions. The Commission has adopted an approach that considers, among other things, the existence of market failure, the effectiveness of other options, and the impact on the market and competition, thereby allowing state aid only in exceptional circumstances.

For many parts of the UK, the challenges of industrial decline remain starkly present – entire communities are thrown on the scrap heap, with all the associated capital and carbon costs and wasted lives. It’s high time the left returned to the possibilities inherent in a proactive industrial strategy. A true community-sustaining industrial strategy would consist of the deliberate direction of capital to sectors, localities, and regions, so as to balance out market trends and prevent communities from falling into decay, while also ensuring the investment in research and development necessary to maintain a highly productive economy. Policy, in this vision, would function to re-deploy infrastructure, production facilities, and workers left unemployed because of a shutdown or increased automation.

In some cases, this might mean assistance to workers or localities to buy up facilities and keep them running under worker or community ownership. In other cases it might involve re-training workers for new skills and re-fitting facilities. A regional approach might help launch new enterprises that would eventually be spun off as worker or local community-owned firms, supporting the development of strong and vibrant network economies, perhaps on the basis of a Green New Deal. All of this will be possible post-Brexit, under a Corbyn government.

Lastly, there is procurement. Under EU law, explicitly linking public procurement to local entities or social needs is difficult. The ECJ has ruled that, even if there is no specific legislation, procurement activity must "comply with the fundamental rules of the Treaty, in particular the principle of non-discrimination on grounds of nationality". This means that all procurement contracts must be open to all bidders across the EU, and public authorities must advertise contracts widely in other EU countries. In 2004, the European Parliament and Council issued two directives establishing the criteria governing such contracts: "lowest price only" and "most economically advantageous tender".

Unleashed from EU constraints, there are major opportunities for targeting large-scale public procurement to rebuild and transform communities, cities, and regions. The vision behind the celebrated Preston Model of community wealth building – inspired by the work of our own organisation, The Democracy Collaborative, in Cleveland, Ohio – leverages public procurement and the stabilising power of place-based anchor institutions (governments, hospitals, universities) to support rooted, participatory, democratic local economies built around multipliers. In this way, public funds can be made to do "double duty"; anchoring jobs and building community wealth, reversing long-term economic decline. This suggests the viability of a very different economic approach and potential for a winning political coalition, building support for a new socialist economics from the ground up.

With the prospect of a Corbyn government now tantalisingly close, it’s imperative that Labour reconciles its policy objectives in the Brexit negotiations with its plans for a radical economic transformation and redistribution of power and wealth. Only by pursuing strategies capable of re-establishing broad control over the national economy can Labour hope to manage the coming period of pain and dislocation following Brexit. Based on new institutions and approaches and the centrality of ownership and control, democracy, and participation, we should be busy assembling the tools and strategies that will allow departure from the EU to open up new political-economic horizons in Britain and bring about the profound transformation the country so desperately wants and needs.

Joe Guinan is executive director of the Next System Project at The Democracy Collaborative. Thomas M. Hanna is research director at The Democracy Collaborative.

This is an extract from a longer essay which appears in the inaugural edition of the IPPR Progressive Review.

 

 

This article first appeared in the 23 November 2009 issue of the New Statesman, Green Heroes and Villains