Show Hide image

The gathering storm

Climate change hits the poorest people hardest. Rich countries got us into this mess. Now they must

To fly above the islands on the Jamuna River in Bangladesh is to see, close up, the physical effects of climate change. Here is a set of islands literally sinking into the sea. Meeting the local villagers, it hits you: the argument that global warming ravages the world's poorest people more than anyone else is so much more than just a cliché.

The main island, which will disappear in the lifetime of many of its inhabitants, frequently suffers major floods, the worst of which was in 2007, leaving behind rapidly spreading disease, homelessness and starvation. Firoza Khatun, a 25-year-old mother-of-three, told me: "In 2007, the water came up to my waist. We tried to stay in the house, we raised our bed higher on bricks and bamboo, but when it came to my waist we had to leave . . . We saved the roof but lost the house. We only had food for five days. I was scared."

Before my trip with the Climate Change Secretary, Ed Mili­band, and the International Development Secretary, Douglas Alexander, I was shamefully in denial of this truth. Like others in a mercifully shrinking minority, I saw "climate change" - that technocratic, uninspiring term - as a second-order, middle-class preoccupation, somehow separate from poverty itself. But visit Dhaka, Bangladesh's capital city, and the link between the two becomes undeniable.

Thankfully, some progressive politicians have been quicker to recognise the importance of the environment to the social-democratic cause. In 2006, Ken Livingstone, guest editor of this issue of the New Statesman, warned in the Guardian: "I just do not think that politicians understand the implications, which at the very extreme is the end of most large life forms. If we slip into irreversible climate change, it means hundreds of millions of people migrating, and deaths. It means the poorest being hit the hardest."

Today, Labour ministers see climate change as a crucial part of their politics. As Alexander told me during our flight over Bangladesh: "I came into politics to change things . . . For our generation of progressive politicians, climate change is the defining test."

Alexander is helping Miliband in the seemingly impossible task of bridging the gap between a developed world (which must be forced to lead the way on carbon emissions cuts) and a developing world (which has often been reluctant to skip the conventional forms of industrialisation previously enjoyed by the west). As Miliband pointed out in Delhi, between 1850 and 2000, 30 per cent of carbon emissions came from the United States, 27 per cent from the European Union, and 7 per cent from China. There is a clear inequality of responsibility, but today the daunting task is to make the whole world carbon-conscious. NGOs talk of the west's "debt" to the developing world and Miliband accepts our "historic responsibility". On 10 September, the EU environment chief, Stavros Dimas, declared that rich countries should be paying €100bn a year by 2020 to cover the cost of mitigation in developing countries, with €15bn coming from the EU itself. It was the first time the EU had acknowledged the cost of global warming to poorer regions.

This is the backdrop to the negotiators' dilemma, just two months ahead of what Miliband has called the "make-or-break" UN summit in Copenhagen. The stakes could not be higher. The British ministers, moving on from Bangladesh to Delhi, emerged "optimistic" after successful talks with their Indian counterparts, particularly the new environment minister, Jairam Ramesh. On the same day, the Indians - assumed to be reluctant to commit to carbon cuts and hostile to US demands for them to do so - projected a modest level of carbon-dioxide emissions in 2031: between 2.8 and five tonnes per person. Current per capita emissions are estimated at 1.2 tonnes, well below the global average of four tonnes. India is now heading towards producing 20,000 megawatts of solar energy by 2020, and is skipping some of the usual steps towards industrialisation: in Kolkata, the ministers were shown the country's first ever housing complex run on solar power. Days later, hopes were raised further when another sticking-point country, Japan, announced that it would cut its emissions by 25 per cent on 1990 levels by 2020.

But Miliband, whose department is leading the way with a commitment to a 34 per cent reduction in the UK's emissions by 2020, warns against complacency. So does his brother David, the Foreign Secretary, who has been touring the EU presenting slideshows on the extreme potential results of global warming, and says that a deal "hangs in the balance". "There's a real danger the talks scheduled for December will not reach a positive outcome, and an equal danger in the run-up to Copenhagen that people don't wake up to the danger of failure until it's too late," the Foreign Secretary told reporters.

There is still a question mark over whether any proposed deal would be enough to make a difference. It has been agreed that the developed west must cut emissions by at least 40 per cent by 2020 to prevent a global warming increase of 2° or more. But campaigners warn that this may be too little, too late. The Committee on Climate Change has recommended that this target be increased to 42 per cent to ensure a 50-50 chance of preventing the rise. But as Tom Picken of Friends of the Earth asks: "Is this a morally acceptable level of risk?"

So, what would be the result of failure to reach an adequate deal when, according to Ed Miliband, there is "no plan B"? Campaigners have long emphasised how climate change hits the poorest hardest, even in Britain. A study by Oxfam and the New Economics Foundation think tank this year noted that the one in five Britons who live in poverty will be the most vulnerable to the impact of climate change. They will be the hardest hit by higher taxation on fossil fuels, the least able to afford adequate insurance against the effects of storm damage and flooding, and the most likely to lose out in the move away from carbon-producing jobs.

But it is the international imbalance that causes most concern. The Joseph Rowntree Foundation is the latest organisation to call for a long-term programme of work on climate change and social justice. "Rich countries got us into this mess and they have the money and the technology to get us out of it," says Jeremy Hobbs, executive director of Oxfam International. "This gives them a double duty to deliver major emission reductions at home and provide the money that poor countries need to start tackling their emissions, too." As the UN has warned: "[I]t is the poor, a constituency with no responsibility for the ecological debt we are running up, who face the immediate and most severe human costs."

This is not simply a western, liberal concern. As Rajendra Pachauri, the Indian chairman of the Intergovernmental Panel on Climate Change (who won a Nobel Prize along with the campaigning former US vice-president Al Gore) has said: "It's the poorest of the poor in the world, and this includes poor people even in prosperous societies, who are going to be the worst hit."

Now, in a letter to the UN secretary general, Ban Ki-Moon, the UK Foundation for Democracy and Sustainable Development has warned that unless governments step up efforts to tackle climate change immediately, the result could be significant incursions into what it calls "future democratic freedoms". The organisation's director, Halina Ward, says: "There is a real risk that as the decision-making implications of huge social challenges like climate change begin to bite, politicians will be tempted to tighten the reins on our democratic rights and limit our access to public decision-making on difficult issues." She adds: "We have to get climate change out of the environmental margins and into the social mainstream . . . The sooner we come to understand it as an issue of democracy and of social justice, the better."

Meanwhile, the spectre of natural disaster looms largest over poor countries. The total number of floods, cyclones and storms has quadrupled in the past two decades. Over the same period, the number of people affected by disasters has increased from roughly 174 million a year to more than 250 million on average. Environmental threat is acute in countries such as Bangladesh, where 119 million of the population subsist on less than $2 a day. For them and millions of others, talk of climate change is not a fad or fashion, a label to help "modernise" a political party, or the subject of dinner-party self-justification; it is literally a matter of life and death. For their sake, long-standing green campaigners and late-coming progressive converts alike must pray for a deal in December.

James Macintyre is political correspondent for the New Statesman.

This article first appeared in the 21 September 2009 issue of the New Statesman, Citizen Ken

Jeremy Corbyn. Photo: Getty
Show Hide image

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 21 September 2009 issue of the New Statesman, Citizen Ken